I am working on an 8x8 texture pack, and since the terrain.png format doesn't work, I used Dinnerbone's unstitcher to convert it. But when I went into the game to check it, this happened:
(Picture is below)
I checked the texture files, and they were the right size and image. This is definitely a bug.
Duplicate of MC-7296, please use the search function to see if your bug has already been submitted. Currently over 51% of tickets are being closed as duplicate.