I came upon this thread on Usenet about a week ago. It sounds like something we should keep an eye out for in case we suddenly start seeing corrupted files on Win2k file servers with compressed folders. So far no response from MS on the cause or a potential fix; the users who discovered the problem find that removing the fix resolves the problem but that obviously leaves the system open for exploit...
See this issue on the following Google Groups.
It appears that there is now a fix for this.
While the KB920958 file has not yet been re-released, MS is offering a Hot Fix as detailed in http://support.microsoft.com/kb/925308
The HotFix (HOT-FIX_287398_ENU_i386_zip.exe for Windows2000-KB925308-x86-ENU.EXE) appears here to have entirely resolved the file corruption issue. No test files copied into, out of, or edited in-place (in +C location) suffered any damage whatsoever. "Test files" includes files known to corrupt pre-HotFix. Recall that in all probability any files damaged pre-HotFix will remain damaged (not specifically tested here).