I'm converting a rather-large PostNuke site over to WordPress, thanks to WP1.5's user-account feature, such that posting requires the creation of an account. The one problem -- admittedly overcome easily -- is that anybody logged in is presented with an "Edit" link after each story, regardless of whether their user level is high enough to actually permit them to edit the story. (I do not, of course, want my site readers to be editing stories.) Likewise, they should not have a "Site Admin" menu item or a "Dashboard," because they are mere site users, not administrators.
I believe that level 1 users should be treated as registered users, not as mini-admins, and their site experience should be commiserate with that. As an increasing number of bloggers move to requiring logins, because of the battle with link spammers, this will likely be an increasingly-requested modification.