Nice video, In responce, I created an application myself, which does the same thing.
I made it in VS 2008 Pro, and all the source code was written by me, with the exception of the login circle, form borders and dragging the form. The corners are a bit blocky, and a gradient on the background may be nice, but I made this to show you some other visual efects you can generate programatically.
I think, that it would be better written in C#, as the if statements are slightly easier to manage because of the curley brackets {}.
Download it here:
http://loginbox.codeplex.com/releases/54001/download/158185
Source code is here:
http://loginbox.codeplex.com/