Question could be "How windows indexing service can handle compressed archioves (zip, rar, etc.)?" Well, probably it cannot handle them. however: if you will use windows indexing, TC will immediately know where archives are, and could use old-style-mechanic search over them.

Indexing service also brings other (marginal) benefits like usage of different so called Indexing-service-filters (which can bring you for example content searching http://www.aimingtech.com/av_ifilter/ )
Present way of searching takes a lot of time and stresses drive quite hard and to be straightforward, its performance seems me to be quite bellow standard. Implementation of any indexing would make TC quite powerful searching tool. (btw: Current versions of Office 2007 makes you to install and use indexing service! And once it is running it can brings instant search results as you type.)