Just an update:

After "upgrading" to 1.3, everything worked fine, except clicking the link in the email only gave a WHITE webpage no download.

I replaced the INCLUDES>MODULES>PAGES>FETCH>header_php.php with the same file from the 1.2 version of the mod and it WORKS! Totally fixed it!

Have tested on a smallish 10mb file and also a larger 60mb file.

both downloaded successfully in IE and FF AND unzipped with no errors.