Sorry for the delay in getting back to this! I read it the other day though, and it *sounds* like things are working right.. the new login dialog is showing, and the issue with the email was partially because the email already existed in the system, is that correct? In the 2.0 version, late this year, we'll have an Automatically Link Users by Email setting, similar to what we have in JFBConnect. We just couldn't fit that in this release schedule, unfortunately.
If I'm wrong though, and you're still having issues, definitely let me know. I'd love to make sure you're setup right.
Thanks,
Alex