Try unzipping using "gunzip bluez-libs-2.25.tar.gz" which will leave you with a tar file. You can then untar, using "tar -xvf bluez-libs-2.25.tar".
If the gunzip fails, are you sure that it is a GZip file? It could be bzip2. Use "file bluez-libs-2.25.tar.gz" to find out.
Alternatively, the file could be corrupted. Normally, there is a file called MD5SUM in the directory where you got the tarball from. Compare the value in this file with "md5sum bluez-libs-2.25.tar.gz" and make sure that they match. If not, then the download was corrupted and you need to redownload.
What distro are you using? It may be easier to install bluez using apt-get. I know that it is in the Debian Sarge repositories.
I hope this helps