The Newspaper option is designed to mimic many news and magazine sites. For example, you have a large story on the left and three smaller stories on the right. Or you could have the lead story on the right, and four small stories on the left. There are over a dozen different layouts available, all designed to mimic popular news sites.
This is similar to the Frontpage view, but with the Newspaper view requires you to have the featured image behind the text.
Here are demos of the Newspaper view in the Content Display block: