I don't know if you are interested, but I using xmms on my zaurus.
First, you should add the address to the new feed to your /etc/ipkg.conf file.
Here is the address: src/gz machine
http://www.openzaurus.org/official/unstabl.../machine/collie Also, use the terminal to install packages. As juanma said, the package manager is very confusing. Using the terminal, you are sure where you installing the packages using the right switches.
Commands go like these:
ipkg install -d "location" "ipkgname"
(location= to location you want to install the package, such as sd, cf, ram)
(ipkgname= the name of the package you want to install)
(and please no quotes, hehehe)
ipkg-link mount /media/card/packages
(this command will link the packages to yor zaurus in case you install them on your sd card.
ipkg-link add "ipkgname"
(this command works like the one above)
Hope that helps for now.