Ok so I made some progress. I think 1.21 must support both formats, which is lucky for us, and I think the offline format supports most of the same stuff if not ALL of it. I have not figured out how to do some things yet though in the offline xml format. See below.
Here is a build that can work 100% offline (Including not signed into PSN and internet disabled). It has placeholder data added from the beta xml that
@marciolsf found in the 1.10 beta pkg. Its a kinda cool time capsule of news from 2007
This means it now shows 117 cities all offline, pretty cool!
I did add Dublin, Belfast and Edinburgh cos western Europe was kinda empty.
This pkg is v1.00, with v1.10 (non beta) files added on top, then v1.20 on top, then 1.21 on top. Then of course spoofed to 1.22 to block the shutdown update. This combined pkg is probably how most peoples installs will have ended up if they kept it installed, as pkg installs/updates can never delete files, only overwrite. Unless they add a clean up as part of the code in the app of course.
DOWNLOAD Life_With_PlayStation_v1.21_NPIA00002_Offline_Test1.pkg
I have not figured out how to add the thumbnails/media in the offline format yet, or add urls for the news stories, or add the little weather icons on the globe. I think they can all be added though including media links, just need to trial and error loads of different syntaxes, shouldn't be too hard though if lots of us try?
I have not really looked much into adding more stuff offline yet, wanted to get something packaged to share. This is what it looks like now.
View attachment 46466
For debugging the app further for online, and for figuring out more offline RSS XML syntax
THIS should help

(I got some help with those. Massive thanks for that.

)
In there you will find decrypted sprx/self from 1.21 and 1.10 beta. This can tell us a lot about the responses needed. Few snippets from when I had a quick look.
View attachment 46469 View attachment 46470 View attachment 46471
This area in particular shows all the xml elements supported in the offline xml for the Live channel, it doesnt show exactly how to use them but we can guess that with some trial and error.
View attachment 46472
See also keep in mind, potentially as a Plan B, worst case, if we cant reverse the authentication, we could maybe have webman update the local xmls with a script on boot up, so have it update this way, bypassing all of the security, so this is why the offline format is especially important as well. It allows for loads of cool custom stuff too.
Then this below looks a lot like some of kind of key, and its right there next to the cmd challenge. Probably directly related to the authentication response.
View attachment 46475
I think one important thing from that prx is this xml format. I don't know its used right now. It is possible it saves some data locally in that format.
Code:
<aas>
<accountid></accountid>
<password></password>
<sessionid></sessionid>
<status></status>
</aas>
Also I think we should all look out for dumps from consoles from before 1.22 update was installed (NPIA00002 and NPIA00007), or even after if it wasn't removed (unlikely). There might be more files in there that can help with taking it further, related to other channels other than "Live" and Folding@Home".