4
go to www.yourwebsite.com/admin.php - templates. clone your default template set. then go to system preferences and set your cloned template set as a default for your website. then go back to www.yourwebsite.com/admin.php - templates and find your news module, click it scroll down to the end of the page and find a template for the block you want to edit (like latest_news.html) click edit, copy and paste the code in any WYSIWYG editor like dreamweaver and save. i believe that this is gonna be it.
Mind anchors
