The compression method is done by PKware. That information was revealed in a chat. Gramphos has a utility called "SAVExpnd.exe" that decompresses the files. Other programs, such as Lovro's MapStat, can also decompress the files.
There are free hex editors out there.
Some of the info on the save files have been posted on the threads, and the BIC file format is just about completely known now. There is a thread in Apolyton on the Creation section that's a Sticky.
My concern about Firaxis revealing too much of the save file format is people cheating with play by email or other multiplayer methods. Though I would hope they have multiple check methods and some checks on the server.
I don't know anything about the Diplomacy information and don't think anyone outside of Firaxis knows it. If you looked at Gramphos' SaveGameEditor, you can get an idea of what he does know. I would wish Firaxis would reveal more information though, instead of having us hack the thing to figure stuff out. I mean, in essence, Gramphos's utilities are stuff they should've implemented with the game, but didn't have the resources for it.
I was planning on creating multiple programs, but other things are coming up and I doubt I'll have the time. Oh well.