This issue is known, and I think it's due to the recent changes in the High Resource Usage system. To avoid this, extract it on your computer and upload via FTP.
Notice to all who need help: Stating the error message in difficulties is always important for isolating a problem's point of origin. Not to mention it is a timesaver for both the helper and customer.
@T1: Well, it might have been a limitation that is causing magicstruck's unzipping problem, so it isn't clear whether this is an issue related to x10Hosting or the code.
@D-i: I don't believe so, magic's problem is about wordpress plugins. It's gugly that has an unzipping issue. Then again, he hasn't specified what about, so it may be related or may not. Hard to tell with the limited info he provided.
@T1: Magistruck said he was using WordPress' built-in method of updating and installing plugins. However, I think he should try with other plugins (just to check if it is a coding issue) and if not then it is probably related to x10 (since I doubt they would release WordPress with a bug in their built-in plugin installer).
With regards to the WordPress updater/installer, there can be two issues.
Since most plugins come zipped, if the unzip is not working, WP will fail.
Secondly, one of the methods scripts use to grab the updates via the web has been blocked by the last upgrade to PHP.
I have no idea which is the problem with WP on his server.
@cptzoap84: Why would you want to use FTP? If you mean to upload the plugin to the server, then I believe magicstruck already knows of this solution; however he wishes the automatic method to be fixed and back to normal.