I did a lot of searching over the web and finally managed to make it work for me. Thanks to fellows who have already published their finding.
The first or general issue that can be found using RSS Feed Viewer web part is mentioned below
"An unexpected error occured processing your request. Check the logs for details and correct the problem"
There are many possibilities for this but the most common issue arise is related to configuration of proxy settings in your application web.config.
As RSS Viewer use internet for downloading feed it requires proper proxy configuration for locating internet source. Similar is true for any custom application that requires data access from internet and is behind proxy.
Following are steps to configure proxy settings.
1. Go to web application directory generally (C:\Inetpub\wwwroot\wss\VirtualDirectories\
2. Edit web.config using proper text editor like notepad. (I used word pad for editing and lost my application)
3. Search defaultProxy
4. Change above system.net XML tag as shown below
<proxy proxyaddress="http://<your proxyserver>:<Your Port>" bypassonlocal="true"/>
5. Please make sure to place proxy address in above format http://
http://184.108.40.206:8080 instead of 220.127.116.11:8080 otherwise you will encounter above error.