Hi,
Sorry, I haven't noticed this question earlier :-( (I try to answer all OS/2 related questions in FPC mailing lists, but only look at the fora here occasionally). There should be no reason for the installer not to work in OS/2 installed on a real HW. I suggest that you try it again with the latest version 3.0.4. If the problem persists, note down the file which the installer complained about. After exiting the installer, try running 'unzip -t name_of_the_failing_zip > unzip.log' in the directory containing (obviously replacing the 'name_of_the_failing_zip' with the name noted down). A bug report (in
https://mantis.freepascal.org) would be probably appropriate then (make sure to include information about the operating system version, and attach the created file unzip.log to the bug report.
Hope this helps