Issues with baking normal maps on a cylinder

So I tried Blender Internal and Cycles, and I get ugly artifacts:

on a cylindrical surface.

Any idea what causes it and how to fix it? Thanks.

Are you using smooth shading ?

Blend file would useful for experimentation

I dug into this more, and apparently there is something wrong with my model export (LWO) as with that normal map and ASE model, it appears properly in-game.

Btw, is there AA for Cycles baking ?