Hi Dave i have downloaded your file from http://dbarc.net/helloworld.exeits size about 255 kb i copied it to some folder together with the file upx.exe downloaded from http://upx.sourceforge.net/download/upx307d.zip
now from the command prompt write: upx -d -q helloworld.exe after that check its size you will see that it is about 388 kb, so this is the real inflated size. now check this bigger size file with your antivirus to see its report.
now regarding why zip and not exe ? i remember i tried to upload a file to a public mail site as an exe file, and the site refuses that for security reasons, so i have compressed it to zip and uploaded it again. i guess something like that here, some users are using company servers and the company servers prohibit downloading exe files. this is my quess.