That's impressive. Here are some other compression curiosities. http://www.maximumcompression.com/compression_fun.php A 24 byte file that uncompresses to 5 MB; another file with good compression under RAR but almost no compression under ZIP; and a compressed file that decompresses to itself.
It's a 1MB file that decompresses to 261 tredecillion bytes of "Hello, World".
No terribly clever stream manipulation; it's a perfectly normal gzip file, other than the size. The generation script is here: http://sprunge.us/VhFc, but see if you can figure it out without peeking.