To add an online source for installation, open the YaST control center and click "Installation Source". A window will open up with the original installation source listed (CD/DVD), and probably nothing else.
Click the "Add" button, and you will be offered a list of protocols / source types. The Packman repository that I have used uses
HTTP. Click this, and a box will pop up asking for a server name, and directory.
For the repository I use (
http://packman.iu-bremen.de/suse/10.0), enter
packman.iu-bremen.de in the
server name box (with no leading or trailing slashes, or protocol). In the
Directory on Server box, enter
suse/10.0 (again without leading or trailing slashes).
You also have the option to choose the type of authentication that the server uses. In this case, the appropriate setting is
Anonymous.
Packman has a number of other repositories, and you may wish to search for one that is geographically closer to you. There is a list on
this page.
As for the other issue, was the icon the one for SuSEWatcher? If so, I have had it on my taskbar in KDE. I never really used it, and I can't tell you exactly how it got there, but it can be used in KDE.