Bubble - You need to re-upload the cp_vars_news_fader.cgi and cp_news_fader.cgi files that are included with the 1.4 zip. They have the new image stuff.
Toibs - After you input the headlines, is the text writing to the newsfader.txt file? If it isn't, it could be that file permissions for the non-cgi directory are off. Also try re-uploading the cp_news_fader.cgi file.
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