There is an issue if there is already a file called "install" in the directory where you downloaded the LimeWire installer. This is because the old file called install is really install.app. When the new installer tries to uncompress, it uncompresses to "install.app(2)", or something like that.

The point is that the number of the file gets appended to the end, which causes OSX to no longer recognize it as an app file, but instead to read it as a package. The solution should just be to delete any file called "install" in the directory where you download LimeWire, which should allow the installer to uncompress normally.