Nelson Minar suggests the proper way to handle login names in Web applications:
The right way to do logins right now on the Web is use email address as the login name and let the user choose their own display name which does not need to be unique. That’s not ideal (email addresses can change) but it works pretty well. If you absolutely have to not use email as the login name, please at least let my login name have a space in it.
Seems reasonable to me.