This is how I fixed it.
First, check in Folder Option that the ZIP file extention is associated with Windows Compressed Files or something similar. If you are using programs like WinZIP or WinRAR. Reinstalling or reassociating the program should be enough...
However, if you are using the built-in Windows function, I also had to do this:
From Start > Run ... type and run the following:
Once you get the prompt telling you that it is registered, you should now been able to open ZIP files in Windows Explorer.