I've found the issue.
As i hovered over the "download file now" I get the following on the bottom left of my browser -
http://download.moodle.org/download.php/plugins/mod/skype.zip
I then naturally assumed that it was an immediate link to the file. So i then right-clicked on the link and hit save as - but instead of getting the .zip file, I was actually getting a .html file.
The link, as shown is not fact a zip file, but is a further HTML page.
No wonder i was getting confused.
Thanks to Phil for getting me to open the file in notepad. that gave me the key to the problem.
Thanks
g