Headsup,
WPyogi is right. Also if you're being presented with the FTP upload option, that means wordpress didn't have the permission to do it the usual way, and fell back to FTP (which can also fail).
Take a look at your permissions. If you've unziped the file on the server using your username, then you're probably the owner of the files-- which means the server can't alter them.
Take a look here if wpyogi's solution doesn't work:
http://codex.wordpress.org/Changing_File_Permissions#The_dangers_of_777
and if you're on linux, you can
chown -R (your www user) (the top level directory of where your files are)
for example:
chown -R www-data /var/www
would work on many Ubuntu servers.
best of luck!