Hi Johnboy,
Currently every elgg subsite is like a separate elgg install, with
separate databases and users, but sharing the same source code.
Users on a subsite can't log in by default to the supersite (which is
a good thing, as the super site is really for admin only). Equally
users on one subsite can not by default log into another sub site.
I think the correct way to solve the latter issue is through
federalisation - solve that and you'd be able to log into any site on
the network, multisite subsite or separate elgg install.
The pieces are there (Oauth, OpenID, Activity streams, etc) but so far
I've not had a chance to really get stuck into it - this could be
something for the wider elgg community!
Marcus