I was able to reproduce on a local machine running DNN 3.2.2 and Blog 3.2.0.  I just copied and pasted the last blog entry from my site and the same problem existed.  URL's were ok in the blog post itself, but the RSS feed appended all sorts of data to URL's:

http://localhosthttp://localhosthttp://localhost/CelebrityCouples/MarcAnthonyandJenniferLopez/tabid/270/Default.aspx

Now, where it get's odd is that if the link is to a URL outside of my domain name, the XML is fine:

http://www.cnn.com/brand/dest/id/99/

Image SRC, both internal and external are fine as well in the XML:

http://www.celebritycouples.net/portals/1/JloMarcAnthony.jpg

So it looks as though there is a function somewhere that rewrites any internal links based on an href tag, and it's not catching something.