Hi Marc Ingram,
Nopes. No form set up or anything. I am simpy calling the WS from the UI. (amin/build/services/user.login). It works perfectly first time and returns me the user object, then if I click the call method button again the error shows up. Then I refresh the page and call the method again (still logged in), then it shows the "Already logged in as username", which should have been shown the first time also.
Sorry for the late reply was away from Internet for a while.