The registration code checks for an existing user name by doing a query of the database, and it uses '=' to compare the strings. '=' is normally case insensitive, but that depends on the character set/collation (which I really don't know anything about). So I'm thinking maybe your database settings for character set and/or collation is causing it not to recognize upper/lower case letters as the same. But unfortunately I don't know how you'd go about fixing that.
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