The lightbox problem is because you've installed Dotnetnuke in a subfolder of the website. This is the type of problem that will happen.
To save start over again from scratch... if you point your IIS website to your dotnetnuke2 folder, then you can get around this without having to start over.
Regards
Rob
The login problem may be due to your use of the smooth login feature in another thread. I mentioned that that feature is not required, unless you know why you are using it.