I installed the plugin 1.5 as described in the manual.
I uploaded it in the plugin archive
Activated it
Moved the file to the root directory (cut the file from the plugin directory)
set it to 777
created/saved/deleted a dummy post.
I get an error in webmaster tool and when i try to access the file via the browser its says
<urlset>
<!--
Generated by Google News Sitemap Generator WordPress Plugin
-->
<!--
Created by Chris Jinks | http://www.southcoastwebsites.co.uk
-->
<!--
http://wordpress.org/extend/plugins/google-news-sitemap-generator/
-->
</urlset>
<!-- Last build time: May 25, 2011, 3:13 pm-->