Are you saying that if you do not provide your own blank option, neither does FormsPublisher - and if you do provide your own, FormsPublisher provides one too?
Beyond that, what you describe as wanting to do doesn't make sense to me - you're saying that if the user chooses option 2 (Product News) you want to have the select list set as if they didn't choose anything. Or am I misunderstanding what you are trying to do?
Have you tried explicitly setting / resetting the list of options for the select list using FormAPI? That might get you the desired behavior (i.e.: [0]=blank, [1]=... [2]=...)