How do I compress a zip folder so it's smaller?

So I create a zip folder drag and drop a folder into it window pops up and says compressing ect.

Okay so the zip folder size still reads the original size of the file that dropped into it?

Which is problem cause I want to upload to MegaUpload some CG sets Images ect.
but even MU reads that the zip file is over for example 400MB

If its already archived then you won't be able to compress it any smaller. You first have to unpack it and then archive it again with more rigorous settings. For example unpack the files into an empty folder and then using 7 zip or something similar right-click the folder and select "add to archive". You can then choose what format and compression level you want to use. The more compressed you want it the longer the time it will take to do. With pictures you should see something like 85% compression on average so don't expect much but do expect it to be smaller size than not compressed.

got photoshop, resize them smaller or if there set on high dpi/ppi lower the rez to 72-90. because some one going to print them