Probably just your download failed. Try to download the ipkg again, probably directly from the slug.
with
wget http://nightlies.mt-daapd.org/dl.php?FILE=mt-daapd_svn-1463-1_armeb.ipk
would fetch the current latest nightly to the directory where you’re at, with telnet on the slug.
So basically just log on and issue the above command, followed by:
ipkg install http://nightlies.mt-daapd.org/dl.php?FILE=mt-daapd_svn-1463-1_armeb.ipk
that should do the trick, given your slug has access to the internet, that is. 🙂