rename it to .ipsw and make sure that winrar or whatever your using does not stick the .zip back on it. then use ireb first to enter pwnd dfu mode then shift click restore in itunes and select your file.might not work unless you use a custom ipsw file instead of a stock one. there is a custom 4.2.6 ipsw i made posted in the iphone forum if you need.

also use a different browser to dl ipsw other than ie like for instance use firefox or safari. ie does not handle the file correctly and will result in a unusable ipsw