The News Feed module uses a default xsl transformation file compatible with RSSv0.91. While the default xsl works fine for most news feed sources, if your feed is using a diferent version of RSS to supply the news, not all attributes may rendered in the expected manner.
The key to using news feeds is to understand the contents of the feed prior to using it on your production site. If you view the source file for the newsfeed, you can find the version number listed at the very top. Also, you'll see some interesting information in the xml elements that will give you an idea of the encoding of the items. From this file inspection, you'll be able to quickly determine if you'll need to use a custom xsl transformation file for it.
HTML is often included in a news feed description, but unless your stylesheet allows it to be rendered, the transformation willl show the tags. One way to overcome this situation is to create a custom transformation file, including the following code to allow HTML to render:
<xsl:value-of select="description" disable-output-escaping="yes"/>
Now, the caution is to know your news source, and be aware that allowing HTML rendering exposes you to the same cross-site scripting issues as using any other HTML source. You must trust the news source and test the feed on a non-production site to maintain a measure of comfort.
You can specify a custom xsl transformation file for use with any news feed, so look around as there are many examples available. In fact some newsfeeds, such as the MSDN news feeds include a reference to their xsl transformation file in the feed, so inspecting the source file is always valuable.