>Has anyone experienced the situation where zip files are not being included in the source files for a build. I want to distribute some zipped files in our installation program created by InstallShieldExpress VFP8 version.
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>It appears as the source file explorer is treating these files as folders instead of individual folders. I want to be able to have some zip files installed on our destination computers as part of the application.

Are you running on XP? It's XP that treats .ZIP files as folders, not InstallShieldExpress.