I’m aware that a lot of users are experiencing problems with Google Reader sync at the moment, so that all feeds are showing error indicators.
You can usually resolve this issue by just entering your Google Reader password in Newsstand’s settings dialog again (tap the ‘gear’ button). This will cause Newsstand to get a fresh login and clear all errors that have accumulated. As Newsstand has to download everything again, this may take a little while, but downloading feeds should work normally again afterwards.
I apologize for any inconvenience this may cause for you.
In other news: Newsstand 2.3 is on its way to the App Store (currently in review) and will bring facebook sharing and compatibility with Yahoo accounts for delicious bookmarks.