Into my local moodle 1.6.2 installation I noticed that I have:
admin->variables->enablerssfeeds = no
and a well working RSS feed block on the Moodle home page.
Is this a small bug of the block that forget to check for the general variable?
I think "enablerssfeeds" is only about generating RSS feeds from Moodle content. It sounds like your "well working" block is about displaying an RSS feed from some other source, which is not affected by that setting.
I believe you are right. I misunderstood it reading the documentation.