Both portions are the SCLogin module.
* The login / register links are set up using the Login View Settings: Login View Settings > Modal Popup and Modal Style > Text
* The menu is done using the Logout View Settings: Show User Menu option.
* We wrote our site template, so the module is just styled to look like it's part of the menu.
From that link I provided
On sourcecoast.com, our Log In and Register links are not actually part of the menu. We are using the SCLogin as a module and displaying in a template position near the menu. The module has then been styled to have a consistent look with the menu and is set up to use the 'Modal Popup' view type and 'Text Links' to launch the modal.