Hi, I spent the day messing with an old zip_upload mod, and kicked the m-zip.php functions. Now, I'm using the PhpConcep PclZip library for extraction, and it works fine with my safe_mode server. It's not fully tested, and unzipped files which arent used do not get deleted when the upload is aborted. But maybe someone can refine this and share it :)
I was unable to create subfolders b/c of safe mode, so all uploaded files will go into "unzipped" folder, I'll probably change this!