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Interesting. I am running *Mathematica* 8.0.4.0 on a PC (with an I7 quad core CPU) running Windows 7. A number of possibilities come to mind, but I would start with by using the Task Manager to check what you have running on your machine.
I am all too familiar with the frustrations of the *Mathematica* syntax -- and expect to experience them often in the future. In particular, I had to analyze your control structure to understand it. It is a clever idea for a pleasant interface....
I have a file from Kaggle of jpg images all saved in a single folder in a zip file.  Importing the "Elements" of the zip file correctly identifies the "FileNames" as an element but asking for the "FileNames" gives an error: "Cannot import data as...