The problem is that your textures are being mapped straight down so the edge pixal is being repeated all the way dow n the side because it mapps solely from the top. If you make the edges of the texture one color, it won't end up with the stretching. But I can't really tell you how to map all the sides. I don't know Blender.
Can you texture by poly or only by object? If you can only map by object, can you layer textures? What are the different modes you can map textures in?
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