According to developers.google.com:
"A KMZ file consists of a main KML file and zero or more supporting files that are packaged using a Zip utility into one unit, called an archive. The KMZ file can then be stored and emailed as a single entity. A NetworkLink can fetch a KMZ file from a web server. When the KMZ file is unzipped, the main .kml file and its supporting files are separated into their original formats and directory structure, with their original filenames and extensions. In addition to being an archive format, the Zip format is also compressed, so an archive can include only a single large KML file. Depending on the content of the KML file, this process typically results in 10:1 compression. Your 10 Kbyte KML file can be served with a 1 Kbyte KMZ file.
Google Earth and Google Maps can read KML and KMZ files directly, and they can save files as KMZ files. By default, the main KML file is named doc.kml."