Hi Phil,
I've also recently got a C860. NIce device if a bit heavier than my old palm m500...
Do a df to check what space you have. During the initial install of rc3, one of the options is to resize your root and user "partitions". You may still have the default and have too small a root (which may explain the wget problems If its too small, reflash and size it correctly.
I have an 80Mb root, rest for user (mounted on /home).
Also if space is not the problem for the ipkg, try manually downloading a file by dropping to the shell and executing wget
http://blah.com.etc and see if anything comes down. It may be a proxy/nat issue. (can you ping a external site?).
Sorry if what I've said is complex, Im assuming you know some linux. I can write in more detail if you need more detailed assistance.
- BRG