My spell checker shows that both "time zone" and "timezone" are correctly spelled. Which one of these is the correct one to use?
There seem to be three spellings: timezone, time-zone, and time zone.
The Oxford English Dictionary defines time-zone,[^1] but curiously, also uses the time zone spelling.[^2] At the same time, timezone is the favored spelling in the US (unless talking about multiple time zones).[^3]
All three seem to be equally correct, but I would use time zone, except for a singular usage in the US for an American audience, in which case I would use timezone. Personally, I feel time-zone is a bit outdated.
[^1]: See time, def. 60a [^2]: Ibid. 27a [^3]: See http://en.wiktionary.org/wiki/timezone
Combined words seem to have a tendency to become compound words, possibly via hyphenation (this is not my observation but Donald Knuth's). I believe this also happened with Microsoft (which was once Micro-Soft, see Wikipedia). With words that are not actually trademarks, it seems to me that there's no grammatical problem with writing the expanded form, simply because it "reconstructs" the concept from elementary parts. A timezone is indeed a zone of time, that is, a time zone.
However, there is a psychological benefit to considering such commonly combined concepts as having an independent existence. I'd say it's the same for common abbreviations, "bus" being my favorite, as those three letters are a Latin suffix to the original word "omnibus", meaning "for everyone". But that's not how we think of them: they are just buses.
I think "time zone" is most common. Google backs me up in this case - googling
"time zone" -timezone (that is, websites with only time zone in them) gives 12.6 million results, but
timezone -"time zone" gives only 6.3 million.