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I just tried downloading http://www.djangoproject.com/download/1.1.2/tarball/ (which is a tar.gz file, not a zip file), and unpacked with 7zip on a Windows box:
C:\tmp\django-1.1.2>dir
Volume in drive C is IBM_PRELOAD
Volume Serial Number is 48E6-C80C
Directory of C:\tmp\django-1.1.2
07/23/2010 12:21 PM <DIR> .
07/23/2010 12:21 PM <DIR> ..
07/23/2010 12:08 PM 5,748,420 Django-1.1.2.tar.gz
1 File(s) 5,748,420 bytes
2 Dir(s) 1,297,465,344 bytes free
C:\tmp\django-1.1.2>7z x Django-1.1.2.tar.gz
7-Zip 4.65 Copyright (c) 1999-2009 Igor Pavlov 2009-02-03
Processing archive: Django-1.1.2.tar.gz
Extracting Django-1.1.2.tar
Everything is Ok
Size: 21063680
Compressed: 5748420
C:\tmp\django-1.1.2>7z x Django-1.1.2.tar
7-Zip 4.65 Copyright (c) 1999-2009 Igor Pavlov 2009-02-03
Processing archive: Django-1.1.2.tar
Extracting Django-1.1.2
Extracting Django-1.1.2\AUTHORS
Extracting Django-1.1.2\django
Extracting Django-1.1.2\django\__init__.py
Extracting Django-1.1.2\django\bin
Extracting Django-1.1.2\django\bin\__init__.py
Extracting Django-1.1.2\django\bin\compile-messages.py
Extracting Django-1.1.2\django\bin\daily_cleanup.py
Extracting Django-1.1.2\django\bin\django-admin.py
Extracting Django-1.1.2\django\bin\make-messages.py
Extracting Django-1.1.2\django\bin\profiling
Extracting Django-1.1.2\django\bin\profiling\__init__.py
Extracting Django-1.1.2\django\bin\profiling\gather_profile_stats.py
Extracting Django-1.1.2\django\bin\unique-messages.py
Extracting Django-1.1.2\django\conf
Extracting Django-1.1.2\django\conf\__init__.py
Extracting Django-1.1.2\django\conf\app_template
.....much more snipped.....
Extracting Django-1.1.2\tests\templates\custom_admin\login.html
Extracting Django-1.1.2\tests\templates\custom_admin\object_history.html
Extracting Django-1.1.2\tests\templates\extended.html
Extracting Django-1.1.2\tests\templates\form_view.html
Extracting Django-1.1.2\tests\templates\login.html
Extracting Django-1.1.2\tests\templates\views
Extracting Django-1.1.2\tests\templates\views\article_archive_day.html
Extracting Django-1.1.2\tests\templates\views\article_archive_month.html
Extracting Django-1.1.2\tests\templates\views\article_confirm_delete.html
Extracting Django-1.1.2\tests\templates\views\article_detail.html
Extracting Django-1.1.2\tests\templates\views\article_form.html
Extracting Django-1.1.2\tests\templates\views\datearticle_archive_month.html
Extracting Django-1.1.2\tests\templates\views\urlarticle_detail.html
Extracting Django-1.1.2\tests\templates\views\urlarticle_form.html
Extracting Django-1.1.2\tests\urls.py
Everything is Ok
Folders: 558
Files: 1914
Size: 19335686
Compressed: 21063680
C:\tmp\django-1.1.2>
So the file appears to be fine and un-zippable via 7zip.