I use DynaZIP which does not have that problem. Does everything a ZIP/Unzip library should do, and unlike PKZIP it is not a DOS program and as an OCX (also comes in DLL flavor) is fully distributable with your apps.

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I've been using XCeed, which works well for most things. It's biggest drawback is that it can't move files into a ZIP file - if you don't want to keep the 'original' you need to deleted them manually. This can be a problem with VFP if you have multiple folders. I'll probably need to go to WSH to handle the delete problems.
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