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I have a weird one for you:
I was running XOOPS version 2.0.93, *I then upgraded to 2.0.10 - finally, I upgraded the news module - to 1.3.
that went fine for a while, until I applied the autologin hack.
So I though I was having version issues, look in my admin control panel and saw that it was still registering as version 2.0.93. I removed the autologin hack, and went back and re-did the upgrade to 2.0.1 - I had done all the procedures correct the first time, I just must not have noticed the old version in the control panel.
When I did this I noticed that the submit.php file is 3 times smaller than the news 1.3 version. - a big question mark there?
I applied the autologin hack again, and all was well. Until I tried to edit a News story from the front-page; the submit.php?op=edit&storyid=xxx link takes me to what looks more like a submit new page. The forms are all empty, even though the link says I'm editing that story number.
Everything else works fine, and if I edit the story in the admin control panel it works fine.
Any help would be greatly appreciated, I really think it has something to do with that upgrade 2.0.93-to-2.0.1 "submit.php" file being so much smaller than your news 1.3 version, but I haven't yet compared the two.
I did try to put your submit.php version back in the /modules/news/ directory, but the php dies at "Edit News Story" or something.