An Ace file, like Zip or Rar, is an archive file containing one or more files that can be reduced in size by a compression algorithm. ACE is a proprietary format that has not been developed since 2007. (current version is 2.69) The ACE compression algorithm is not license free, so ACE archives can only be created by the commercial program WinAce.
The decompression process can be integrated into other programs with the help of a free dll, which is why unpacking routines can be found next to commercial ones as well as in many free pack programs. Winace is a pretty efficient packer, whose compression rates are often much better than zip and still pack at high speed.
In the meantime, the ACE format has lost much of its importance because on the internet ZIP and RAR are the dominant formats and more and more often 7-Zip is used. But since it was a very popular archival format at the turn of the millennium, you can still find a few ACE archives.