Ok, it's probably not the BEST solution. But it works...
1) Admin -> general settings -> moderated membership signup (uncheck this).
2) In skin1 > customer > main > register.tpl leave all the code in place, but comment out the input fields. For example...
Code:
<input type=text name=uname size=32 maxlength=32 value="{$userinfo.login}">
would become
The text ("username" for example) can be deleted or commented out. In some spots you can comment out the whole row, but be careful*
* I kept backing up the file after each step, and press refresh to view the change, so I could easily restore if I commented out too much
3) You will have to do this process twice in the register.tpl file since there are two sets of username/password combinations. One is for the initial register page, and the other is section is for the page you see when you update the info. Make sure to comment out the fields in both sections of register.tpl.
4) That got rid of everything except the heading and horizontal line. I can't remember what file those were in (anonymous_checkout.tpl I think). Anyway, that part was very easy to find & delete.
I tested the process and everything appears to be working splendidly. I do agree with Boomer though that taking the username/password option off is a dumb idea generally (this client insisted though so ::poof:: it's gone now).
Thanks again for your help Boomer
(I happily made a small donation since you got me started).
:Stacey