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The "latest news" is a graphic header for the front page of ur news area, it could be edited in your template files. However, I don't really think thats what you're after here... if you do as directed above & add a few images: reviews.jpg & news.gif, for example, & drop those into your yoursite.com/modules/news/images/topics/ folder via FTP or your file manager... Then go into ur admin section > News > Edit Topic > Reviews - you should see a drop down select menu containing reviews.jpg & news.gif. Choose ur reviews image, hit submit, & reload ur news page. You should see the change you're after, I believe...
For reference, here is the
main news page of my site, same as yours but with the topic images (mine are flash) in place. Each different colored XOOPS dude is a different news topic image, each displays alongside news items posted in his category. Get it?
[Edit: You may also have to enable these images to be displayed via your news admin > Preferences]
Hope this helps...