Pete,
I lived in a small central Florida (Sebring, FL) town for a short while and i
remember I tended to read their newspaper i guess for the same reasons
i read big city ones--random violence, scandals, and real estate ads.
Here's a great
newspaper makin' money makin' how to article I really liked.
Pay attention to the five letter word he says is now the key money making technique for any upstart newspaper.
As proof he gives an example of how another central Florida newspaper did it.
The article is geared more toward people with a journalistic bent so seems you'll probably like it.
I liked Ankesh's idea and you may get around the programming idea by starting a local wiki I believe there is open source code for it.
This will allow the community to update the NEWS so you won't have to.
Here's some other newspaper makin sites:
Links to journalism resources like
Poynter which I absolutely love.