I typed in the digg feed you posted and it works fine. It looks like you are typing in Index.xml with a captial I and not a lower case. Try a lower case i for index.xml and see if that works.
Here is a screenshot for you. The only problem with the new verion is that it will load up all of your RSS feeds onto one screen and can take awhile to download info if you have many feeds. I also noticed that if it takes more then a certain time to download the feeds, the software will close and go back to the home screen. It would be nice to load the software up and have your feeds show as a list and you can click on which one to show and load up. This can keep things less cluttered.