I'm not sure if this belongs in the Base Reporting or Procedures forum...but anyway, I have several Proc Reports that use "by" processing and I thought I would take advantage of the "bypageno=n" option in Proc Report. I set it to bypageno=1. I also have set the system options of number and pageno=1. Bygroup1 starts with page 1 and then the second page is also 1 but then it goes in order from there. Then when it changes to bygroup2, it seems to carry over the pagination from bygroup1 for one page and then re-sets to 1 and goes from there. This happens for each subsequent bygroup. Is this a bug in 9.2 or am I using the pageno and bypageno incorrectly? I can provide a code example if necessary (I just didn't to save space in case this was a known issue though I couldn't find any reference to it by searching support.sas.com.
I can duplicate the behavior you see -- with multi-page reports; but with single page reports, things seem to be resetting to 1 correctly. (Of course, there's no opportunity for things to go wrong with a 1 page report...)
You might want to open a track with Tech Support on this issue. If there is any workaround or open defect, they will be able to give you a definitive answer.