How to use?

What kind of 'Nodes' is it looking for?
I tried to tag some products as having a taxonomy term under "Newsletter Categories".
It still says "1 Newsletter Lists failed to send because no published nodes found for their terms"

So... what terms?
Where? How to Setup?

When I go to http://website.com/admin/config/media/newsletter/lists/edit/#

At first, there was no Category to select, so I just put Updates
Then it would find that automatically, found out it made a Taxonomy Category called Newsletter categories, with the Term Updates.

So I thought, if I attach this Term Reference to my Products, and then select the reference in some of my products,
it should then send those items with the newsletter?

Well, I tried, so how does this work Exactly?