User Registration Not saving Display Name

I am using Gravity Forms version 1.7.4 and User Registration 1.5. On our site, the Registration Form is filled out by an admin and then login information is e-mailed to the user. The end user is not filling out their own registration form.

When I add a new user, all of the fields made correctly except for the Display name.

In the User Registration settings I set the Display name to be {first name} and I tried {first name} {last name}. No matter what the setting, the display name is always set to the username.

Could there be a setting that I missed?

I have the same issue: http://i.imgur.com/lHy3PhT.png
Despite choosing firstname lastname for the Display Name, I always get the username in that field.
I sent an email to Chris, hoping for the updated Registration Add-on.
Thanks
Alexander

I did get the new updated add-on (via email from Chris) and tried it out this morning - however it's still having the issue on "simple" name fields. If I use "First Name" and "Last Name" type of name fields, it seems to be fine - but "simple" is just not saving anything. I just wanted to let you know that - not getting any errors anywhere for it either.

In the meantime, I'm just using a plain input field to collect the combined name - and using the "name" field for "first name", "last name" and extended fields - that seems to be working fine.