Ok, best way to explain it is to have you just log in and see what happens.
If you go to
http://www.rjroffroad.com and on the left menu bar about halfway down is the login box.
Go ahead and log in (live site, keep in mind):
username: test
password: account
Now that you're logged in, you can see that the login box didn't get switched to the "logged in" version. You will actually find the logged in version, down at the bottom of that left menu bar column.
I suppose I could just re-order it so they're stacked right against eachother, but how do I get it to remove the one, and replace it with the other?