What's the difference between gunzip and unzip?

unzip decompress zip algorithm same *.zip files and gunzip decompress gz algorithm that same *.gz files. If you migrated from windows, You have many compression algorithm in UNIX world such as *.7z , *.gz , *.bz2 and so on. Also you can compress file which already archived with tar command: such as :

tar -zcvf mydir.tar.gz mydir #gz and tar
tar -jcvf mydir.tar.bz2 mydir #bz2 and tar 
tar -Jcvf mydir.tar.xz mydir #xz and tar 

They are two different programs to unzip two different types of compressed files:

• unzip: "list, test and extract compressed files in a ZIP archive" (from the man page). The Zip file format is the most commonly used compression format on Windows machines, the file ending is typically .zip. See the Wikipedia article for more information.
• gunzip: For a similar file format for single compressed files, much more common in Unix/Linux systems. The file ending is typically .gz. gzip files contain only one compressed file, if compression of a folder-like structure is required, additional tools like tar are used, typically resulting in compressed folders with a line ending .tar.gz or .tgz. This is what Wikipedia has to say about the gzip format and program.