There is no problem with the install package. Problems that you could have would be:
- failure to unzip the downloaded package. The file you download has "UNZIP" in the filename. You can't install this file. You must unzip, then you'll find folders for Joomla 1.5 and Joomla 1.7/2.5. Inside the appropriate folder you will find the install files and a readme file that gives further details.
- If installing the correct file and you get this error, it's normally because your upload_max_filesize setting in PHP is 2M or less. The readme file explains this also (and lots of other forum posts), but this setting must be larger than 2M.