Windows XP comes with builtin support for uncompressing zip'd files. If you prefer to continue using a dedicated utility like pkzip or winzip which has more functionality, you probably need to disable the limited capability of XP to prevent interactions and problems, run the following command:

regsvr32 /u %windir%\system32\zipfldr.dll

Want to re-enable the builtin zip capability, run the following command:

regsvr32 %windir%\system32\zipfldr.dll

Additionally Windows XP by default, opens EVERY compressed file to search through because it treats them as directories. This can extend the time taken for a drive-level search for up hours and sometimes hangs (the search windows) before it can complete. Another reason to disable the builtin zip server - if you keep lots of zip files on your HD and you use XP search capabilities.

Chris comments: found that the way windowsXP treats zips like folders was the stupidest thing ever, so of course I wanted it gone right away. I ran regsvr32 /u %windir%\system32\zipfldr.dll and It worked, but now winzip wasn't associated with zip files, I ran winzip to re-associate and the zip/folder 'bug' was back. It turns out that the fix for this is to run the command, and then rename, or backup and delete the zipfldr.dll file and it says gone.