This happens as soon as the width of the browser window is below a certain value. The example above was generated with a width of 800, a reasonable value I guess. I tried to make one tr per input field, but that does not change the behaviour. Setting the size of the text input fields to 14 makes it look good at browser width 800 but too small when wider, there must be some other way to solve this that I don't know.
My solution would be to leave out the login box at all, IMHO the link in the header is sufficient and as soon as someone wants to do something restricted there'll be a redirect to /register anyway. But since the box is on the site I guess there has been an agreement that we want to have it.
And something else: please rename the Main Site instance, because it shows up in the title tag of the front page.