Have a look at our ezCheckout mod:
http://www.websitecm.com/xcart-easy-checkout.html

From the screenshots that seems what sportruck posted above ..

On the pearls website that we are interested in you only seem to have 3 main areas ( cart info, registered customers and new customers) and not that huge column for new user data.

I need the functionality of being able to have the user use their email as the login name or username, not a seperate username. Ezcheckout mod does not have that functionality.

The pearls site will have the huge area for new user data on the next step for non registered users, they just moved it a step back. You could do the same by putting the login box and html text linking to the next checkout step on your cart page.

There's a free mod for this on the forum, I believe it's posted by b00mer.