Sometimes its just so hard to do the simple things with Windows, like unzip files without a 3rd party DLL.  After banging my head on this for a couple of hours I finally figured out a way to do it using Windows PowerShell and the Windows XP ZIP explorer extensions through the Shell32 COM interface.

function UnzipFile([string] $zipFile, [string] $destinationFolder)
{
    if(test-path($zipFile))
    {
        $shell = new-object -com Shell.Application
        $srcFolder = $shell.NameSpace($zipFile)
        $destFolder = $shell.NameSpace($destinationFolder)
        $items = $srcFolder.Items()
        $destFolder.CopyHere($items);
    }       
}