There still seems to be an endless loop with sidebar login. I've had to resort to using the old "Meta" widget for now. Too bad, I loved this plugin.
I'm not a programmer so I'm not sure how to help other than by saying I have cleared caches on my server and computer, but this error happens from several different computers using several different browsers so I don't think it's a cache issue.
I type in a username then password and when I hit enter (or click login) I am returned to entering a username and password. Sidebar login simply will not pass the uname and pword to wordpress or else is just stuck in a loop somewhere.