How can I make an image in a news item a link??

Use this kind of tag structure. Ultimately however the Img tag is not required specifically as Chops has built the system to support most image types by default. the Img tag is needed mostly in the case that the image your are linking is not a traditional image link.

[url=http://][img]http://[/img][/url]

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Six Demon Bag
Jack Burton: Hey, what more can a guy ask for?
Egg Shen: Oh, a six-demon bag!
Jack Burton: Terrific, a six-demon bag. Sensational. What's in it, Egg?
Egg Shen: Wind, fire, all that kind of thing!