I think this could do the job...

set nocount on

SET ROWCOUNT 1000

declare @rowcount int, @batchcount int, @rowsupdated int

declare @LastKey nvarchar(341)

select @rowcount = 1,@batchcount = 0, @rowsupdated = 0, @LastKey = ''

while @rowcount > 0

begin

  begin tran

     update MyTable

     set NewZip = ZipCode,

          @LastKey = NameKey

     where NewZip is NULL

        and NameKey >= @LastKey

     set @rowcount = @@rowcount

     select @rowsupdated = @rowsupdated + @rowcount

     if @rowcount > 0 select @batchcount = @batchcount + 1

  commit

end

*If NameKey were unique, we could use ">" instead of ">=" .