I had this similar problem installing a zone in OpenSolaris build 129 running inside virtualbox 3.0.4 on top of OpenSolaris 2009.06 snv_11b. The funny thing here is that my OpenSolaris 2009.06 host box is in a datacenter and has a full 100mb/s connection out to the internet, but my build 129 guest is having problems with downloading IPS packages even though there's not all that much network activity on the host. Here's the output from installing a zone (which of course, downloads packages from IPS which seems unneccessary IMO):
# zoneadm -z dhcpzone install A ZFS file system has been created for this zone. Publisher: Using opensolaris.org (http://pkg.opensolaris.org/dev/ ). Image: Preparing at /export/zones/dhcpzone/root. /usr/lib/python2.6/vendor-packages/pkg/client/api_errors.py:295: DeprecationWarning: BaseException.message has been deprecated as of Python 2.6 self.message = message pkg: 0/1 catalogs successfully updated: 1: Framework error: code: 28 reason: Operation too slow. Less than 1024 bytes/sec transfered the last 30 seconds URL: 'http://pkg.opensolaris.org/dev'. (happened 7 times) 2: Framework error: code: 28 reason: Connection time-out URL: 'http://pkg.opensolaris.org/dev'. /usr/bin/pkg:2014: DeprecationWarning: BaseException.message has been deprecated as of Python 2.6 if cre.message: ERROR: failed to create image -- This message posted from opensolaris.org