Can Google Map API GXml parse .kmz files directly? if not how is the best way to convert .kmz file to .kml? The .kmz file is stored on database and PHP code is used to retrieve it.
I'm pretty sure that there's no way to unpack zipped data with Javascript, which you'd have to do before passing the data to GXml.parse.
GGeoXml can handle KMZ files. It does it by passing the URL to a Google server which unzips the data and parses it there, then returns the individual overlay objects to the Javascript client.
Since you're reading the data with PHP, you might consider unzipping it in your PHP script, and serving the unzipped data to the client. You may need to do some work to your PHP configuration in order to enable the PHP Zip File functions.