Fred-
Significant flaws have been pointed out. Legal exposure
You fail to recognize all efforts that have been made to address this very problem. The issue has been discussed in much detail, both on this mailing list and on the wiki. A legal vetting process is part of the basic requirements of the Wikinews proposal. Legal counsel will be sought on controversial issues.
What is and isn't a flaw is often a matter of opinion. I simply disagree with you on the level of risk and the potential remedies.
On controversial issues Wikipedia itself is often unable to realize in NPOV in practice. In the news context it is dead certain we will not; experienced news organizations employing trained journalists don't and there is no rational basis for supposing we will.
NPOV is an ideal, it is not a binary. Meeting certain formal requirements, such as all opinions being attributed, is relatively easy. The issue of balance is much trickier. It is not desirable for us to add off-topic "fluff" to a story simply to make it appear more balanced. More so than the internal factual balance of an article we will have to keep an eye on the overall balance of the site, and the visibility of the stories.
"Experience" in the context of traditional news organizations increasingly means "experience at concealing propaganda" as investigative journalism becomes a rarity and many news organizations deliberately instruct their employees to violate neutrality. The Iraq war was a good example for this violation of neutrality as "embedded journalists" spread their verbal ejaculate all over the papers and TV screens, repeating Pentagon propaganda like the priests in the Middle Ages repeated the Church position on the pulpit.
Wikinews is truly indepedent, the process is egalitarian, neutrality is non-negotiable, and the contributors come from many more different backgrounds than those to standard news media. Thus, there is very much a "rational basis" for supposing we can do a better job than mainstream media on this point.
Regards,
Erik