[eluser]OverZealous[/eluser]
[quote author="silvergear99" date="1260216099"]
Both forms are rendered from a user model. Is this the problem ?[/quote]
If they are the same user model, then yes, because the validation is done on the object itself, and the errors are tracked on the object.
I assume that after the user attempts to login with the sidebar, they are redirected to the "normal" login page, correct? If so, simply create a new, empty User object to use for rendering the sidebar, or, alternatively, create an empty user for the registration page (since logically the user is new).
But the error messages shouldn't be shared across two different user objects.