Thank you for bringing up the idea of having better support for the .7z format in Ubuntu.
The 7z format is in fact support by file-roller for quite some time but it does require the installation of the command lines utilities to work.
Having p7zip installed by default was discussed in 2008 and decided against since the format was not judged popular enough to justify the extra CD space it would use, that discussion happened on https://launchpad.net/bugs/282294
The issue is pretty much addressed in natty though since file-roller has been built with sessioninstaller support now which means it will ask you if you want to install "p7zip" when you try open an archive using that format: https://launchpad.net/ubuntu/+source/file-roller/2.32.1-0ubuntu2
The other suggestion made there was to add .7z support to the gvfs archive backend, gvfs is using libarchive though which has been designed to work on streams format and 7zip is not in that category so it doesn't seem likely that will happen. You can read http://code.google.com/p/libarchive/issues/detail?id=41 which is the upstream libarchive ticket about the issue
In summary it seems that the issue is mostly adressed in natty with the new file-roller version.
I think 7zip format included in Ubuntu is good to share files with others, in some cases 7z compact with a higher compression ratio than zip.
There are people who install Rar by saying have a higher rate of understanding on Linux, put 7z can increase its use, is the best thing is that it is free unlike the Rar.
Using both tar and 7z is a bit redundant, since both formats handle archiving. It works, but you might as well use tar.xz instead and get similar results.
That's a good point. However, for encryption one should probably use gpg. You can use it on the compressed file, in effect creating a .tar.xz.gpg file (although gpg itself can do some compression). A number of ciphers are supported including AES-256 and even asymmetric encryption.
.7z, .zip & .rar are the only formats that allow encryption of compressed files. Only .7z & .rar allow files to be compressed into multiple, split volumes(great if you are trying to upload files on a hosting website). Neither encryption nor split compression is allowed by .xz. Right now, it is an inferior format feature-wise. Since .rar(the version most commonly used) is proprietary(free version has not caught up yet), then .7z is the best bet.
Regardless of what the best archive format for various purposes, there is often a need to open archives created and distributed by other people. Since the choice of format is often decided by other people, it seems like the sensible thing is to support as many different formats as possible out of the box.
Sometimes licensing or technical difficulties may prevent this, but as far as I know there are no such obstacles preventing the inclusion of 7zip.
Yes I think p7zip should take about a 5 MB or less in the iso image.
Do the developers of Linux distributions do not like the format 7zip because the developer's official 7zip does not have an official version for Linux?