If you are using CWM recovery..
Go to "mounts and storage", "format /system" before flash the new Rom. Good luck ;)
problem solved, thank you OP and phileasx!
Format /system also before install Zip. ;)
have done so, wiped cache and also wipe data/ format
have tried following OPs steps in installing,
wiped data and cache, installed from ZIP but when it reboots, its back to normal firmware, i also noticed 'signature verification failure' in the notes when installing from zip