How can you create an html username/password form that can log into a password protected directory without having the windows login box appear?

Either use PHP with or with a mysql user's table, or a simple javascript function can do it for you.

PHP secure and non-secure methods:

http://webmonkey.wired.com/webmonkey/00/05/index2a.html

Javascript non-secure (i dont advise this):

http://www.ddj.com/documents/s=2715/nam1012432119/index.html