Installed .zip files create filenames with directories

We have a theme we’ve created. Once we zip the file and install it on WordPress the files in the images directory are also listed in the root directory with the directory path in the name. So zebra.jpg is listed in the images folder but also in the root folder as images/zebra.jpg. This is causing major problems. The theme cannot be deleted within WordPress, we have to delete it off the server. Does anyone know any peculiar way we are suppose to be zipping the themes? We’ve tried Winzip, 7-zip and others with no success. We are compressing it on Windows 7 and even tried it on a Mac thinking that maybe the windows compression software was the problem. WordPress seems to be reading all our zipped files the same way and creates the additional files once installed. When we view the zip file on the desktop those additional files are not there. We also tried Artisteer files (a WYSIWYG template generating software) which when exported as zip work just fine. However, Artisteer files exported as a folder, then zipped don’t work! Please help – we are desperate to find an answer!!!

Dawn