Thanks Anthony,
I'm glad you like the site
I think I'm going to simply display login form directly on the checkout page if user is not logged and use canonical url to inform the crawlers that it is serving login page. We don't have access restriction to the basket so we shouldn't have a problem with it and out registration and login forms are on the separate pages - so again, these could be easily indexed by search engines.
Thanks for the advice - much appreciated!