My Yahoo appears to have taken a first step toward personalized news. If you add the RSS feed beta to your My Yahoo content (use the drop down menu at the bottom of the page), then add a couple feeds (they have a convenient keyword search to help find them), they'll give you an option to see other feeds that might be of interest based on the feeds you selected. The recommendations seem fairly good.
Not much, but it's a first step. The question remains, why bother exposing the RSS feeds at all? Do people really want to pick RSS feeds for tens or hundreds of sources? Or do they just want to read the news that is most relevant to their interests?
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