While extreme compression algorithms exist (like LZX), they cannot turn an operating system into a fraction of its size without removing critical system files. To hit 500MB, the creator has likely:
Have you ever been burned by a tiny ISO download? Let me know in the comments below. windows 7 highly compressed 500mb iso fullversionforever.net
If a file name has "Highly Compressed" and "Forever" in it, it has a virus. Delete the download, run your antivirus, and move on. While extreme compression algorithms exist (like LZX), they
The "ISO" or the "Extractor" required to open it is highly likely to contain: run your antivirus