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I am seriously concerned if they did do this, as that would virtually nullify RSS feed's...
So yahoo can't do that? or can they?

Is it just me or isn't that module just a version of RSS feeds or does it do more?

To me it does look like just RSS? so infact how can Yahoo on the one hand say that here is our RSS; then when your site ranks above their own...no you can't have it any more?

Sorry still find this very hard to believe?

I don't think that Yahoo's decision necessarily nullifies RSS feeds. The thing with Yahoo, Google and a couple of other syndicators is that they have pretty clear usage guidlines about their RSS feeds. They are basically for personal and non-commercial use.

The good news is that there are plenty of other RSS providers, and you aren't relegated to only using Yahoo feeds with the module. You could use RSS feeds from

Big News Network

Topix Net

About.com

The New York Times

and a few other news sources that are basically begging people to syndicate their headlines.

You may not get all the pretty pictures that Yahoo rendered, but you don't have to worry about lawsuits, either.