I'm not exactly sure what you're trying to do with "creating a local repository". approx-import simply places .deb files in the part of the cache that corresponds to a *remote* repository, if it can find one, so that it doesn't have to be downloaded again. It's optional, since the .debs will be downloaded when needed.
If you create your own repository with dpkg-scanpackages, you can't place it in the approx cache. Approx expects its cache to have a specific layout, namely a collection of (partial) mirrors of remote repositories. You'd have to put your local repo somewhere else, and use file:/// URLs in /etc/approx.conf to tell approx where to find it. Otherwise, the current version of approx is 5.7. If you still have problems after addressing the above issue, please try that version. -- Eric Cooper e c c @ c m u . e d u