Is it preferable for a newspaper to report on a new medical study and publish Yet Another(tm) "Researchers at [University] find cure to cancer" story, or, is it better for the newspaper to refrain from talking about the medical paper entirely?

Personally, I have to go with the later. Given the choice between botched reporting and no reporting, I'll go with no reporting. It is better to be uninformed than misinformed. It is easier to correct 'uninformed' and the state of 'uninformed' is easier for self-aware people to recognize in themselves.

Consider the fallout caused by the media botching the reporting of the FTL neutrino anomaly. People lost their jobs because reporters could not be arsed to do theirs.