I think there's no bug in the texture mapping feature of AOI, it's just not very simple to use (but texture mapping is even worse in Blender). [;)]
After various tests I found how to apply a texture image on the top of a cylinder.
As shown in the following capture, keep Mapping equal to Projection, enter 90 in Rotation X field and enter the diameter of your cylinder in Scale X and Y fields (caution : the properties of a cylinder let you choose its radius so enter twice that value).



If you want to apply a texture around the cylindrical surface of a cylinder, you should choose Cylindrical in the Mapping combo box.