Re: what is the news page
The ‘news’ URL is a normal blog type list of posts created on the blog that the bp home theme is running. For instance Andy’s post here : http://testbp.org/news/beta-release-scheduled-for-december-15/ was posted on the blog at testbp.org which is the wpmu root blog.
The confusion comes into play because there is no ‘news.php’ file anywhere. bp lurks in the background looking for URLs that belong to itself and re-writes them into something else. In this case the URL mysite.org/news gets hijacked and mysite.org/index.php gets loaded instead.