Yeah, you can do that, below is how to do it, but would be good to have a copy of the existing file (UserControls > Skin > NewestItems.ascx) before you try, just in case:
1. Open this file UserControls > Skin > NewestItems.ascx
2. Copy and past this code:
<user:ProductTemplateImageOnly ID="UC_ProductImageOnly" runat="server" />
Between:
<ItemTemplate><li>
And This:
</li></ItemTemplate>
3. You can apply the needed css around the pasted code, but it should be inside the <ItemTemplate> tag.
OR you can try this if you like:
Replace this code:
<asp:Repeater ID="rptNewestItems" runat="server">
<HeaderTemplate>
<ul>
</HeaderTemplate>
<ItemTemplate>
<li>
<asp:HyperLink ID="lnkProduct" runat="server" NavigateUrl='' Text='<%# Server.HTMLEncode(Eval("P_Name")) %>'></asp:HyperLink></li></ItemTemplate>
<FooterTemplate>
</ul></FooterTemplate>
</asp:Repeater>
BY this code:
<asp:Repeater ID="rptNewestItems" runat="server">
<ItemTemplate>
<table>
<tr>
<td style="width:52px">
<user:ProductTemplateImageOnly ID="UC_ProductImageOnly" runat="server" />
</td>
<td valign="middle" align="left">
<asp:HyperLink ID="lnkProduct" runat="server" NavigateUrl='' Text='<%# Server.HTMLEncode(Eval("P_Name")) %>'></asp:HyperLink>
</td>
</tr>
</table>
</ItemTemplate>
</asp:Repeater>
Give it a try and let me know if you have problems.