so...trying to isolate the error....
When I upload as a .zip I can download via my web page, but when I either upload as a zip or upload as a zip and rename the file it will not download correctly.
Download the xpi file then rename as zip. Then opening gives a file corrupt error.
One possible suggestion ( http://support.on2.com/flixpublisher/faq/) was
You are using Microsoft IIS as your webserver, but the MIME type (also called "Content-type", or "Internet Media type") for XPI files has not been added to your IIS configuration.
To fix this problem, add the following to your IIS MIME types configuration:
Mime Type: application/x-xpinstall
Brinkster added this to their IIS server and all is sweet now.