I use the latest trunk version of reader, because the version before has the same error.

I added two RSS links and the module works great. But if I add the block "Recent posts" I get a blank page with the following error in the front end:

Fatal error: require_once() [function.require]: Failed opening required '/home/libraries/simplepie/simplepie.inc' (include_path='.:/usr/lib/php:/usr/local/lib/php') in /home/modules/reader/blocks/feed_recent_posts.php on line 20

Since the lib was updated, the file is not longer available:
https://github.com/simplepie/simplepie/#wheres-simplepieinc