I know this was posted a long time ago, but a response may help you or someone else. I had the same problem on my ubuntu system. I ran `nmap localhost` to see what was up on port 8000 and discovered:
8000/tcp open http-alt
You may have something similar blocking port 8000. I changed the port number to a slightly higher number in /etc/icecast/icecast.conf as you did. In XMMS, you can configure the plugin by right clicking (titlebar, not song list) on XMMS, then options > preferences, select 'Effects Plugins' tab, click liveice, and click configure button at the bottom. I set the server (under 'server' tab) to `localhost` and the port to the same port I set in my config file. (It of course would not be local host if XMMS and icecast are not on the same machine.) Debian icecast package is built with crypt passwords, so you may have to use `makepasswd -crypt --string=XXXXX` to generate a password, replacing XXXXX with something. Put the first output into your XMMS password field, and the second into your icecast.conf. Make sure to restart the icecast server after saving the config file. This allows my XMMS to connect to my icecast server. It immediately crashes when I try to play something, though. Still working on that.
Hope this helps!