I've just been using Smith Micro's free Stuffit Expander utility to unzip... it handles the merging, which OS X does not do natively.

Works fine when the zip is properly compiled... i.e. runtime (and any docs) folder at the root.

With some zips, e.g. the new Daz zip format, this isn't the case... so I got the more fully featured Stuffit Archive Manager, which allows separate extraction of sub folders within a zip archive.