diff -ru drupal-5.8-orig/modules/user/user.module drupal-5.8/modules/user/user.module
--- drupal-5.8-orig/modules/user/user.module	Fri May  9 22:12:41 2008
+++ drupal-5.8/modules/user/user.module	Thu Jul 10 10:30:04 2008
@@ -1020,6 +1020,10 @@
           watchdog('user', t('New external user: %user using module %module.', array('%user' => $name, '%module' => $module)), WATCHDOG_NOTICE, l(t('edit'), 'user/'. $user->uid .'/edit'));
           break;
         }
+        else
+        {
+          $user = $registered_user;
+        }
       }
     }
   }