Using the public flickr feed link, you could use this custom xsl.  Don't know if it would suit your taste but it gives you a start.  Another thing worth mentioning again - if you have issues using the new module, try using the xml module with a custom xsl. Could give you an idea or two of what else to look at if it works with the xml module, then something in the new news modules validation contraints might be giving you the issue.

<?xml version="1.0" encoding="utf-8"?>
<!--
Modified Atom Feed xsl - tuned for Flick photo lists
Phil 'iwonder' Guerra
2007-05-11
-->
<xsl:stylesheet version="1.0"
  xmlns:atom="http://www.w3.org/2005/Atom"
  xmlns:xsl="http://www.w3.org/1999/XSL/Transform"
  xmlns:flickr="urn:flickr:"
  xmlns:media="http://search.yahoo.com/mrss/"
  xmlns:dc="http://purl.org/dc/elements/1.1/">
   <xsl:output method="html"/>
 <xsl:template match="/">
  <style>
   <xsl:comment>
   .syndication-content-area {
   }
   .syndication-title {
    font-size: 1.1em;
    font-weight: bold;
   }
   .syndication-description {
    font-size: .9em;
    margin: 0 0 10px 0;
   }
   .syndication-list {
    font-size: .8em;
    margin:0 0 0 20px;
   }
   .syndication-list-item {
    margin: 0 0 5px 0;
   }
   .syndication-list-item a,
   .syndication-list-item a:link {
    color: blue;
   }
   .syndication-list-item a:active,
   .syndication-list-item a:hover {
    color: red;
   }
   .syndication-list-item a:visited {
    color: black;
    text-decoration: none;
   }
   .syndication-list-item-date {
    font-size: .8em;
   }
   .syndication-list-item-description {
    font-size: .9em;
   }
   </xsl:comment>
  </style>
  <xsl:apply-templates select="/atom:feed"/>
 </xsl:template>
 <xsl:template match="/atom:feed">
  <div class="syndication-content-area">
   <div class="syndication-title">
    <xsl:value-of select="atom:title"/>
   </div>
   <div class="syndication-description">
    <xsl:value-of select="atom:tagline"/>
   </div>
   <ul class="syndication-list">
    <xsl:apply-templates select="atom:entry"/>
   </ul>
  </div>
 </xsl:template>
 <xsl:template match="atom:entry">
  <li class="syndication-list-item">
   <a href="{atom:link/@href}">
    <xsl:value-of select="atom:title"/>
   </a><br/>
   <xsl:value-of select="atom:content" disable-output-escaping="yes"/>
   <span class="syndication-list-item-date">
     (Date Taken: <xsl:value-of select="dc:date.Taken"/>)
      </span> 
  </li>
 </xsl:template>   
</xsl:stylesheet>

Oh, sorry Peter, I thought that the new module allowed for custom transformations to be used.  I didn't have it loaded until this morning.  I see that you are right about that not working.  The example will work for the XML/XSL module though, and this brings up a couple of questions about the new module's settings that I'll email you about.

Thanks,

Phil