It is actually done from SharePoint designer. There is no coding required, but you do have to create the dataview web part from within that application. You would first create the data source as the web service, then just drag and drop it onto a page and change up the format the way you want it to look.

This is also true for forms services. You will have to open the previously existing forms for the new fields to populate in the library.

Let me know how it goes Anders. I know you are using powershell, would love to see what you came up with to make it work.

It is straight xslt if you want to code it and then package it in a solution package. Thats the only other thing I know of, or there are some 3rd party tools that let you build DVWPs without using SPD. Lightningtools.com has a web part that you can use for that.

Is the site for the RSS feed a SharePoint site in the same environment?