I am able to upload jpg's without an issue but when I go to upload zip files I don't have the same luck.
I made the zip files on a pc and used ftp to upload them to the 'uploads' folder. Once uploaded I change the permissions to 777. Then I goto import and it says I have no files, so I goto import and then it just shows me the images inside, not the zip file.
The whole idea about handling the upload process is to allow you to select individual files one by one or to archive and upload number of files as a single operation.
In any event, the singly selected files are uploaded to the Upload folder, one by one, and all the files contained in the Zip archive files are unpacked and then delivered to the Upload directory in a single operation.
To import the files contained in the Upload directory into your gallery you should then use the import tab.
Archiving a single file in a zip container for upload is an ineffective way of doing this, but as you've said it does extract and upload the file to the Upload directory.