I am running a test with this plugin on my webpage: http://www.isenne.nl/blog/
After testing a lot of feeds my images still do not show up as Featured Image. Also the images do not care for the "Maximum width size of images" setting.
A have 2 RSS feeds that should wordk with images (according to your youtube clip):
1. http://feeds.mashable.com/Mashable (images in description)
2. http://www.nu.nl/feeds/rss/algemeen.rss (images as enclosure)
I don't have any errors. The feeds are imported to my blog (as posts) and the post show's exactly what is in the feed.