What module are you using to create the internal feed? I really can't tell and it would matter a bunch. Many 3rd party and even some standard DNN modules use their own 'flavor' of creating news feeds. In order to troubleshoot feeds, I always begin by analyzing the news source to study its' structrure, then I can understand how best to transform it.
From what I can see, it looks like you need a bit of customization to translate the HTML source or eliminate it entirely. I can't tell you what the best approach would be without the news source though. The default dnn xsl doesn't allow escaping of HTML so it appears as just the characters < becomes < and so on, which is what you are seeing. The simple way to translate HTML is to just modify the element in your xsl that your need to translate by including something like this example that disables output escapting on a 'description' element...
<xsl:value-of select="description" disable-output-escaping="yes" />
More specifc examples can be found in my posts, and on a very friendly DNN site, DNN Creative...
www.dnncreative.com/RSSNewsFeedXSLStylesheet/tabid/162/Default.aspx
Here's a link to an example of removing HTML from a news source...
blog.thekid.me.uk/archive/2007/05/17/stripping-html-tags-when-using-xslt.aspx
And another that explains, probably more than you want about xsl, including a secition of disabling output escaping...
www.w3.org/TR/xsl
Hope that gets you pointed in the right direction....
Cheers