OK Presuming you have Stuffit Deluxe 6.5.x, the problem can be solved as follows:

with the LimeWire.sit file selected, Choose "Get More Info..." from the Stuffit "Magic Menu" up by the time in the Desktop menu bar, or hit [shift] + [apple] + i. A window should open with 2 tabs...

At the bottom right of the "General" tab of the window that appears, type "SIT!" (without the quotes)...

click the permissions tab, and make sure that all 3 options are checked for the owner (which should be you assuming you are the Administrator for that machine.)

now choose "expand - unstuff" from the magic menu or hit [apple] + u, and it will do just fine...

Im sure there is a UNIX way to do this, but I don't know how.