Hello. I'm not sure if you got your FeedWordPress working. I've got mine working on PHP 4.3.11, so it's not PHP 5, but based on your first post here I thought perhaps you're missing the Links/Syndicated section in the admin panel. If you didn't know already, this is where you add your feeds to be syndicated into posts. The Options/Syndication is just where you set the global FeedWordPress settings.
After trying various ways to pull and publish news feeds using WP, I'm very happy with FeedWordPress.
Now, what I'm trying to figure out is how to have the feed-to-posts updated automatically. I've tried setting up a cronjob with the cronjob line (25 * * * * cd $HOME/www/wp/wp-content ; php -q update-feeds.php)supplied in the FeedWordPress documentation, but I know nothing about cronjobs and I'm pretty sure I didn't modify the given cronjob string correctly.
Please let me know if you (or anyone else) has been able to configure things to get the FeedWordPress feed-posts to update automatically. I've tried various WP-cron plugins, but apparently those are to update regular WP links.