Hi Crispin,
For the image problem go into the settings for the feed manager, under Security Settings check the box to allow external images.
The double html encoding problem in the title is now fixed in the source code repository and it is is easy to fix in your copy of /FeedManager/FeedManagerModule.ascx.
Look for this:
<div class="rsstitle">
<%# "<" + FeedItemHeadingElement + ">" %>
<a href='<%# DataBinder.Eval(Container, "DataItem.Link")%>' <%# GetOnClick() %>>
<%# Server.HtmlEncode(DataBinder.Eval(Container, "DataItem.Title").ToString())%>
</a><%# "</" + FeedItemHeadingElement + ">" %>
</div>
and change it like this:
<div class="rsstitle">
<NeatHtml:UntrustedContent ID="UntrustedContent2" runat="server" TrustedImageUrlPattern='<%# allowedImageUrlRegexPattern %>'
ClientScriptUrl="~/ClientScript/NeatHtml.js">
<%# "<" + FeedItemHeadingElement + ">" %>
<a href='<%# DataBinder.Eval(Container, "DataItem.Link")%>' <%# GetOnClick() %>>
<%# DataBinder.Eval(Container, "DataItem.Title").ToString()%>
</a><%# "</" + FeedItemHeadingElement + ">" %>
</NeatHtml:UntrustedContent>
</div>
Best,
Joe