Yes you can use an XSL stylesheet to modify the RSS output to the look/feel you want.
Here's a sample I just did on our site http://www.profitimo.com/ArticlesBlogs/tabid/53/Default.aspx (at the btm of the page).
To do this...
Newsfeed Module/Edit Module/
Under Newsfeed Stylesheet, click upload XSL file below...
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CREATE XLS file using Notepad and save it as "name.xsl"
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<?xml version="1.0"?>
<!-- Edited by Lee Sykes DNN Creative Magazine http://www.dnncreative.com -->
<xsl:stylesheet version="1.0" xmlns:xsl="http://www.w3.org/1999/XSL/Transform">
<xsl:output method="html" indent="yes"/>
<xsl:param name="TITLE"/>
<xsl:template match="rss">
<!-- Do not show channel image -->
<xsl:for-each select="channel/item">
<xsl:if test="position() < 5">
<br>
<!-- to open links in a new window, change target="_main" to target="_new" -->
<strong><a style="color:#800000; text-decoration:none" href="{link}" target="_main"><xsl:value-of select="title"/></a></strong><br></br>
<!-- only display markup for description if it's present -->
<xsl:value-of disable-output-escaping="yes" select="substring(description,0,300)"/>...
</br>
<br></br>
</xsl:if>
</xsl:for-each>
</xsl:template>
<xsl:template match="description">
<br>
<xsl:value-of select="."/>
</br>
</xsl:template>
</xsl:stylesheet>