When you extract a file, FilZip decompresses it and places it in the folder you specified before. If the archive was packed with paths, it restores the folders and retains the structure of any subfolders.

Select Extract from the Actions menu or click on the Extract speedbutton in the toolbar. The shown dialog allows you to set different options and the folder where you would like FilZip to put the files to.
For more information see the Extract dialog box section