gzip is not the same thing as zip. gzip will only compress individual files - that's why you see .tar.gz as a popular archive format on UNIX. Tar bundles up a directory structure into a single file, and gzip compresses it. And gzip files are not compatible with zip compressors or decompressors. Different name, different file format.
If you want to create zip files specifically under 10.2 I'm pretty sure you'll need a third party tool.
If you just want to compress stuff, I thought under 10.2 you could just right click and choose 'compress' and you'd end up with a .Z file, but I might be misremembering and that might have come in later. But I thought that was in from the ex-NeXTSTEP days.
Bear in mind that under early OS X a lot of command line tools don't play terribly nicely with Mac metadata. So if they're Mac files you want to compress, grab an OS X specific application, don't just assume that the command line tools will work properly.