no, it always means "in". but different languages have a bit of a different perspective on certain things. for italians, the food is in the plate, the same way you would say it is in a bowl in english. same goes for languages like french or german. english is kind of an exception amongst european languages as it considers food to be ON the plate. so, the word always means "in", but sometimes you can not translate stuff litterally.
Ok... I can understand that we have a limited vocabulary to play with so far, and some of the practice sentences are both amusing as well as good practice, there by. But this one... I spent extra time trying to figure out how I was misunderstanding this! In the hat? Won't that ruin the hat? (Come to think on it, though, when was the last time I even owned a hat?) Though really is it any stranger than a line of spiders taking a drink of acqua all that the same time? Probably not...
On the other hand, silly pictures also make the lesson(s) stick better. :)
The speech recognition doesn't work all that well. Well... extremely well, considering what it is, but the reality is that speech recognition just isn't up to it yet. Mostly it gets it right, but it's a guess on the software's part.
Happens to me a lot, and very annoying it is.