Most Cocoa solutions for zipping and unzipping simply use NSPipe / NSTask to let the unix executables handle the job. I'm pretty sure that zip and unzip are not available as executabls on the iPhone, so you're probably stuck using some code such as the info-zip unzip C source code. Since objective-C is a superset of C, you can use C code no problem
http://www.info-zip.org/UnZip.html
Info-zip's implementation is very portable and should port to the iPhone just fine, though you'll have to deal with the fact that the unzip method will probably want a byte buffer and you'll probably have an NSString or an NSData, but that's not hard to deal with. If you've got it as a string, you will have to be careful about encodings, though.