I believe he is referring to the files that he has unzipped from the archive.
If you're using the content manager, right click the asset opened for editing and click "Edit in Explorer". Keep the folder up and move/replace files as necessary.
That would make sense, although the original post was not very clear.
However, if it's compressed images that's being referred to here, the option that needs to be unticked (RLE Compression) is during the save/export process.
