Missing /news Folder

I installed the latest version of Dolphin and on my front page under Latest News it wants to go to a /news folder which is non-existent. How is this issue fixed?

Nevermind =] I figured out why it was messing up. I needed to edit the .htaccess file.

Yes, this is just permalink, no such folder.

OK, I've got the same problem, and I've not figured it out... Can you tell me what to edit in the .htaccess file? I'm a bit of a newb when it comes to this sort of stuff. I get the permalink thing, and for the time being I've just turned off the 'friendly' stuff, but would be nice to know how to get it working properly.

Wouldn't it be nice if everyone who "figured out why" actually posted the answer... 

Danny