The thing about Zillow is that it runs to the "gross" or generalized results. So if your home is on a quiet cul de sac or the busier Park Victoria or the extremely busy Calaveras Blvd., Zillow may not be able to well discern these individualities.
In North Valley and Milpitas, short sales and foreclosures are bringing some of the numbers down so quickly that in fact, in some cases, Zillow is about $100K over the actual sale prices people are experiencing in this market. For instance, at Somerset Park, a nice complex of condos in North Valley, homes are selling for high $250Ks and Zillow still has them at $355K.
Try not to stress over it. If you are going to sell your home, get a great realtor who will promote with intensity, and help you stage, clean, fuss and generally brighten your chances with all tools available. Including if you can a great feng shui check and "cleaning" of the energy of the home. Seriously, I believe that all tools are needed to get the best price you can.
Zillow is trying to keep up with the home pricing but it is not perfect. Your best measure will be to find a similar home on a street like yours with schools the same as yours -- and lot and square footage close to yours -- and find out the closed price on that home within a few weeks of time. That's your best indicator of value. The computers can't quite keep pace with the market.
I don't think you can personally change your Zillow zestimate by sharing comps with Zillow that point to a higher value, but if you succeed in that challenge, let me know because that would be good information.