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    Several PHP tutorials and a lot of hours later, I've figured out how to do it in 1.3. It's actually much easier than in 1.2. In fact, it's so easy the thought of the time I put into figuring it out is nearly enough to make me break down and sob like a child. 

 On the bright side, I can now call myself a beginner in PHP.
So here's what you do:
1. Open news_block_top.html.
2. Locate 
 <a href="<{$xoops_url}>/modules/news/article.php?storyid=<{$news.id}>" <{$news.infotips}>><{$news.title}>a> <br /><{$news.teaser}>li>  
 on line 936.
3. Add 
 <a href="<{$xoops_url}>/modules/news/index.php?storytopic=<{$news.topicid}>"><{$news.topic_title}>a>:  
 to the beginning of the line.
4. Click save, and you're good to go.
It's that easy. Just the one file to edit.
I still have a question for those who know a lot more about this than I do. If an article is in a sub-category, this method will display only the subcategory. How do I make it display the parent category first? (i.e. parent category: sub-category: news title)