When downloading the Air Desktop App from a D7 installation, Internet Explorer 8 changes the file extension from ".air" to ".zip" making the download unusable to the user.
This appears to be an IE specific problem. I believe it is the same issue as described in THIS ARTICLE
This has been tested on 3 seperate computers and at least 2 different operating systems. including Vista & XP.
I also verified that this isn't just an issue with my Beta installation by downloading the same file from the Boonex Demo site. The download from the Boonex Demo site had its file extension changed to ".zip" as well.
Special thanks to my wife and dpi for helping me verify this bug.