Fortunately, the Associated Press (AP) has released a replacement app called AP Mobile (free, universal). It has many improvements, most notably in the overall look and feel. Even better, the GUI is consistent across the iPhone and iPad versions, which wasn't the case with AP News.
AP Mobile looks better than its predecessor, but provides minimal customization. You can choose white text on a dark gray background, dark gray text on an off-white background and adjust font sizes. News categories you're not interested in can be disabled (tech news is disabled by default for some reason). What's odd is that the pictures and video portions of the app ignore your category choices. If I turn off sports, for example, I still get sports photos and videos. That's silly.
As before, you can opt to get bulletin alerts when you are using the app, and share stories via email, Facebook, Twitter. Stories can be bookmarked for later reading as well. When you set the app up, provide your location (optionally) to receive local news. The app is ad supported, but I didn't find them intrusive.
There are still negatives. The textured backgrounds are distracting. Navigation still feels off, and when just starting with the app I got some unexpected results by tapping at certain places. I think the pictures are too big for the iPhone screen, and on the iPad a ribbon of videos and stills grabs a lot of screen real estate. Sadly, you can't turn the feature off.
The AP is the largest news organization in the world, and I expected more from this update. Still, it is an improvement over it's predecessor. It hasn't crashed in heavy use, which is a real plus. Still, for getting news, I really prefer Zite, Flipboard and Pulse News. Those apps draw from multiple sources and feature superior navigation and looks. Zite has particularly clean screens, and it learns about your news preferences as you use it.
I think the AP app is worth having on my iDevices, but it seems way behind the competition. You can see some screen shots of the iPhone version in the gallery below. The iPad version looks essentially the same, but, obviously, has more screen space.