First of all, let me say that I LOVE this plugin.
I just updated to the latest version (1.6.8) and was doing some testing.
There is a minor issue with images in posts. When a new blog is created from the template, if there is an image in a copied post, the URL of that image points to the media library location of the template blog image image instead of the current blog.
Here's an example from my test blog:
The new blog is: http://testblog169.theblogpress.com
The template blog is: http://defaultblog.theblogpress.com/
Go to this post:
Open the image in a new tab and the url still points to the template blog (the image is copied over correctly, it's just the link in the post that's wrong):