first of all, you're posting in the wrong forum. this forum deals primarily with the decompression and restoration of 'protected' executables.
secondly, you havn't done your homework. here's a pointer in the right direction:
Microsoft supports three lossless compression techniques:
storing, MSZip, and LZX. Within a cabinet archive file, any combination of these techniques may be used.
MSZip is essentially the same as the deflation compression method used by PKZip.
LZX is an LZ77-based compression technique that uses static Huffman encoding.
LZX uses more memory, but can produce better compression ratios than MSZip.
Stored, of course, means the file is stored into the cabinet uncompressed.