Here is the error output form debug:

Warning [PHP]: fopen(): URL file-access is disabled in the server configuration in file modules/xoopsheadline/class/headlinerenderer.php line 62
Warning [PHP]: fopen(http://packages.gentoo.org/archs/x86/gentoo.rss): failed to open stream: no suitable wrapper could be found in file modules/xoopsheadline/class/headlinerenderer.php line 62
Warning [PHP]: fopen(): URL file-access is disabled in the server configuration in file modules/xoopsheadline/class/headlinerenderer.php line 62
Warning [PHP]: fopen(http://slashdot.org/index.rss): failed to open stream: no suitable wrapper could be found in file modules/xoopsheadline/class/headlinerenderer.php line 62
Warning [PHP]: fopen(): URL file-access is disabled in the server configuration in file modules/xoopsheadline/class/headlinerenderer.php line 62
Warning [PHP]: fopen(http://packages.gentoo.org/archs/x86/gentoo.rss): failed to open stream: no suitable wrapper could be found in file modules/xoopsheadline/class/headlinerenderer.php line 62

Have you compared the files in your headlines folder on your server with the files in your original copy of xoops? It seems that you have a problem with the module itself according to what I see as the wrapper not being found.