The RSS mod you're using resets the $template variable used in Zen Cart to something else. And then, when control returns to Zen Cart, Zen Cart doesn't understand what to do because the dependencies have been changed.
To work around that, try this:
In your define_holiday_news.php file, try adding two extra lines, as shown:
Code:
<?php
$zenCartTemplate = $template;
$XMLFILE = "http://www.associatedcontent.com/rss/recent_74.xml";
$TEMPLATE = "http://www.theribbondiva.com/holiday-template.html";
include("rss2html.php");
$template = $zenCartTemplate;
?>
In v1.4 the Zen Cart internal code will be using less-common names (as a byproduct of various transitions) and will thus be less prone to conflicts such as you're experiencing here.