After following the great tutorials from http://www.raywenderlich.com/ on how to submit your app to the app store from square one I started planning my beta test program.
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I've had this exact problem even where, like you (as far as I can tell), everything is done right.
What I discovered is that if you've EVER had the url to the plist file or the app file incorrect then your iPhone will always fail to install. There's some kind of cacheing going on where the phone fails to download the updated plist file if it's previously downloaded an incorrect one.
The fix I've used is to try a different phone (that hasn't cached a previous version), or to make a new version at a different URL. Sounds crazy, but it worked for me!