No idea what's happening, it seems to be a zip issue?
The launcher just sucks in general, and I'm probably going to completely replace come Act II it with an MFC application anyways. In the mean time, I will suggest checking if the directory path to the folder has unicode characters or spaces. The downloader/zip functions don't play nice with paths that have special characters in the name.
The issue about performance is likely due to the graphical elements on screen in the main game. I will make modifications, and release an update that hopefully improves performance. However, I cannot guarantee you improved performance following this update, as we (the whole of the dev team) do not have any hardware that causes such low framerates.