BZIP2, short for 'Burrows-Wheeler Block Sort Text Compressor,' is a file compression utility used in Unix and Linux systems. It efficiently reduces file sizes using the BZIP2 compression algorithm, commonly resulting in smaller files with the '.bz2' extension. It is favored for its high compression efficiency and is often used for software distribution and data archiving.

BZIP2 is designed to compress single files and does not serve as a file archiver, which is a software utility used for combining multiple files and directories into a single archive file. BZIP2 is particularly efficient at compressing text data, and decompression is relatively fast.

In the above code, the resulting BZIP2 file must have both the file extension and '.bz2.' This is crucial for later decompressing the file back to a text file. Inside the using block, use the Add method to add a text file to the final BZIP2 archive. Finally, use the SaveAs method to export the BZIP2 file.