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I don't have a picnik account, so i don't really know how picnik does it
But take a look at a prototype of mine... I've used a listbox and removed the border and background using styles
EDIT: Oh... the bottom, I see now... never mind this post!
Actually, it doesn't match what I have described above. Maybe the following link will help you and the others: http://www.picnik.com/app (No need for registration - just look at the bottom).
I hope all of you share your ideas with me.
I guess your implementation would work...
The picnik newsbar does not link to anything... if yours does, you can prolly use link buttons, they give you a hover effect!
And you don't have to create label objects for each news item, you can reuse the same label. After one's finished animating out, put it back in its original position and change its text.