If you upload a zipfile using Box C of the Photo Albums -> Upload Photos admin page and you have the 'After upload: Go to the Import Photos page'-box ticked, it will be extracted on entering the Import page.
You will see the photos or a directory containing the photos.
If you see the directory, it can be imported to an album directly, or you can set the 'Import photos from:' selection box to the directory and import them selectively.