...But that only handles ZIP files. RAR files will have to be done with something else, like this DLL:

http://www.example-code.com/csharp/rar_unrar.asp

This won't create RAR files, but it will...

You may have to create a custom deployment package to do this-- the default MSI creator doesn't afford you many options, but the deployment package project does:
...

Depends. If you're using the datasets in the designer view, you really don't have THAT fine-grained of a control over when the datasets are instantiated, and how long they stick around in memory.
...

You'll probably need to download it locally, modify it, and then re-upload it.