I am a content  Query web  Part newbie but am learning a lot as reading
more about how they are customized. I am wondering if it is possible or
if anyone has created custom fields in the content query  webpart that
access data from an external data-source or database (specifically
Oracle, but I assume this is similar to SQL).

Has anyone ever tried this? Or know if it's possible?

Theoretically possible if you are using MOSS Enterprise. In that case
you'd setup a BDC definition for the external data, then add a BDC
column to the source list/library for your CQWP. Your other option
would be to use a Data View instead of the CQWP.

I have been trying to get a content  query web  part I added on a page.
Even after I specify the document  library from which the query  is
supposed to get the documents from its still saying ... No Items
Returned. Anyone knows whats going on here?

Managed to get this one by myself. Had to activate Team Collaboration
Lists under Site Features in the Top-level site settings. Somehow this
feature was disabled.

I have a custom list  with the following items  in it
Title, Image, Url

The image links to a file in a picture library.

My goal is to use the Content Query web  Part to display something like this:
image title
where the title is clickable to the URL.

Is this possible using just the web part  out of the box, or do I need to use
sharepoint designer