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You've pretty much got it right. While the terms of use differ per client, if a newspaper or TV station has paid the appropriate license fee, they can use the story both in print and online.
Also, provided credit is given (to the AP or Reuters, as well as the original writer), the piece can be used as a source for another, different piece. It's also my understanding that the end of a story can be lopped off, if space becomes an issue.
But you can't directly edit the peice, and, unless you're a paying client, you can't reprint it without permission from the wire service.
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"We must have waffles. We must all have waffles, forthwith. Oh, we must think.
We must all have waffles and think, each and every one of us to the very best of his ability."
-- Professor Goldthwait Higginson Dorr, Ph.D.
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