Google's news service is compiled and edited 100% by a computer. My guess is that it works similarly to their search engine. That is to say it searches news sites, determines what subjects are getting the most attention, then searching for all sites on that subject.
The advantage here is that it is one degree removed from direct human editing and fact-tuning. Granted, it's colored by what the major news sites want you to read, but it also allows for minority voices to slip in.
That's why I'm going to suggest that everyone check out news.google.com's world report. In the last 24 hours, there have been articles featured involving the inner workings of the highly fragile middle east peace plans, the Hezbollah's reaction to the new environment in Israel following Abbas' steps to work with Israel, coup fallout in Africa and possible use of torture by the Kuwaiti government. Granted, what I know about these issues is merely a nail-scratch, but it's better than what I find on CNN.com.
Also, the BBC still does a good job, though still west-centric. Alternet.org also rules but they pissed me off a bit when they quietly removed an article immediately after 9/11 that mocked Bush for shopping for a new villain. It could have been read the wrong way but I think the article was dead-on and they should have stuck with it.
Finally, MediaMatters.org is incredible. Sign up for their mailing list and see ten examples every day of how the popular media just makes shit up when it suits them. And Fair.org rocks but they don't update as much as they could, I think.