This is done if a customer has decided to checkout without registering. Once we have the eMail address of the user we can determine whether he has already registered. If a person is registered we prompt him to enter a password. If a person isn't registered, then we ask for his details.
Note that a registered person can login before the checkout procedure by entering username and password in one go by clicking the myAccount link.
Also note that KonaKart can be configured to allow customers to checkout without registering. In this case, once a customer has decided to checkout, we just ask for his shipping details.