Greg Linden has all the details, including:
Google News can suggest news stories just for you. If you have Personalized Search enabled, you can sign in to your Google Account to get recommended news stories based on your past news selections.
Google News can … compare your tastes to the aggregate tastes of other groups of similar Google News users. Simply put, we recommend news stories to you that have been read by many other users who’ve also read similar stories as you in the past.