Oh, you're reading it from elsewhere? I thought you were generating it yourself from the news module. It seems you are using newsREADER module. I don't know anything about that.
Regardless, if you look at the source of the displayed page, you'll find:
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I'm not sure how much HTML you know, but the "<img src=...." indicates the source picture (i.e. file name). As you can see, there's nothing there, just "".
I set up a feed and sure enough, missing picture icon in IE. I tried turning off the "logo" checkbox but I still get it.
Sounds like a bug. Not sure where the logo is supposed to come from, maybe that's an RSS standard feature.
I assume the XML should point to a logo for that to work.
Try locating that line of code and deleting it in the PHP source, or else you can always fix the NewsReader module so that this line is ONLY writen out if there is something in the logo field AND the logo checkbox is enabled!