As promised, OpenID module is ready for consideration to include into core. The module as it stands implements OpenID Authentication 1.1 & 2.0. It uses all native drupal code - no external libraries required other than the bcmath extention for php is required (for which a hook_requirements has been implemented).
When enabled, this module adds some form_alter for user login forms (both block and page) to allow a jQuery link to expose the login field.
Upon successful authentication, a local user (uid) is created, and mapped to the openid for further use.
Because I can not add directories via diff/patch (and there are 5 or so files), I ask reviewers to please just check out the HEAD version of the module from Drupal's contrib CVS.
Good OpenID providers to test against are : livejournal.com, myopenid.com or openid.aol.com .