unzipping in my downloads folder
What is happening is that that files are being unzipped to the Downloads folder, BUT the date that is being used is the date that the file was created on whichever system it was created on.

Unfortunately that date is not usually helpful to you.

If you use Lion you can sort a folder by "Date Added" by pressing control + command + 4 (or View » Arrange By » Date Added).

If you are not on Lion (or even if you are), then I highly recommend The Unarchiver which works on 10.4+. It can:
* extract zips to a specific directory (I use ~/Unzips)
* always unzip to a new folder (which makes them easier to find, some files unzip to a different name, which is probably part of the confusion you are facing) 
* and it can set the modification date to the current date/time, which will help the sorting problem:
* it can automatically open folder it creates (so you don't have to go hunting for it)
* it can either keep the the original .zip or move it to the trash.

Even on Lion, I use it as my default ever since I found it, because of all the additional features that it offers.

And it's free (donations accepted).