I personally found that some packages wouldn't install because they had dependencies that were broken in some way. This was about a year ago though, so I don't know how things have changed since then. Also, node packages seems to be small and specific so npm downloads many dependencies for each package. Again, I only played around with node for a little but I got a bit frustrated with all the packages and dependencies.
I think the issue you are describing really stems from poor semantic versioning. People will peg to specific revisions that they happen to use rather than depending on the general major or minor revision level, so small fixes don't naturally propagate to second- or third-level dependencies. There's no good solution to the problem that doesn't lead to other sorts of hell (imagine asking users to manage the revisions for third-level dependencies)
Were you using Windows? Although node.js "works" on Windows, there are a number of modules that only compile under UNIX, which makes Windows basically useless for node development.
