NSLog makes mention of re-archiving .sit files as .dmg files, something I've been doing since before I moved to OS X, using .img on OS 9.

He makes mention of not having Stuffit Deluxe, I'm lazy and do it for a simple reason, one less step. Double click file and it mounts and I drag the file to someplace else, no switching programs or anything. With .sit files and Stuffit Deluxe you switch to another program and drag the file to the desktop. If all you have is Stuffit Expander you get it all, wether you want it or not.

Toss in the ZLIB compression in .dmg archiving you get pretty good compression, fast too, not as good as .sit but still good.