You need to include the project as an Android library project, it seems you haven't done this.
From the "Including In Your Project" section
Android-ViewPagerIndicator is presented as an Android library project. A standalone JAR is not possible due to the theming capabilities offered by the indicator widgets.
You can include this project by referencing it as a library project in Eclipse or ant.
- Download all the source of the project, save it somewhere on your PC.
- In Eclipse click File/Import/Existing Android Code into Workspace and choose this folder.
- In your project click Project Properties/Android and in the Library section choose this project.