I haven't played that much with bones, but it might help if you set the mapping mode in the vertex modeler to cylindrical, and change the shader to the standard Multi Channel or Parametric. If the mapping mode is set in the shader it is going to ignore the changes in geometry of the object, and still try to map it in a cylindrical aligned with whatever axis, instead of a bent cylindrical. Setting the mapping mode in the VM doesn't work as well if it is a low poly model. The other possibility is to make a UV map with the UVMapper (that comes with the CD), which takes a little playing with, but has great results.