I think I know why I was getting it..., When I had @anonymous permissions on all sub folders of my vfs(even the template folder), the login screen for the tog would appear correctly because Im not logged in and @anonymous is allowed to access the template folder, but when I log in from that screen im logged in as foggy and firefox tries to download the template data as foggy but gets a 401 error, prompting the login box to request the templates data.
Edit: Just tested, for me it was user error of restricting the template folder to @anonymous only. probably irrelevant but while testing I found this in the log and thought it was weird.
2/12/2007 6:12:44 PM 127.0.0.1:1556{Foggy} Connected
2/12/2007 6:12:44 PM 127.0.0.1:1556{Foggy} Requested GET /~login
2/12/2007 6:12:44 PM 127.0.0.1:1556{Foggy} Not served: 401 - Unauthorized