Fixed ;)

simple_members.php

<?php
//Get the correct ID for the plugin.
		$thisfile = basename(__FILE__, ".php");

//Initiat Hooks
		add_action('plugins-sidebar', 'createSideMenu', array($thisfile, 'Simple Members'));
		add_action('edit-extras','members_protect_toggle',array());
		add_action('changedata-save', 'members_protect_toggle_save', array());
		add_action('index-pretemplate', 'start', array());
		add_filter('content', 'members_content');

//What a useless function… Doh…
function start() {
	session_start();
}

//Define and Initiat Plugin
		register_plugin(
			$thisfile,	// ID of plugin, should be filename minus php
			'Simple Members',	# Title of plugin
			'2.0',	// Version of plugin
			'OWS_Matthew',	// Author of plugin
			'http://OwassoWebSolutions.com',	// Author URL
			'This plugin creates a simple user system (Does not allow access to Administration Task!)',	// Plugin Description
			'plugins',	// Page type of plugin
			'members_admin'	// Function that displays content
		);

//Initiat Addministration Page
		function members_admin() {
			$errors = array();
if(isset($_POST['add_user'])){
	$username = preg_replace('/[^A-Za-z]/', '', $_POST['username']);
	$email = $_POST['email'];
	$password = $_POST['password'];
	$c_password = $_POST['c_password'];
	
	if(file_exists('' . $username . '.xml')){
		$errors[] = 'Username already exists';
	}
	if($username == ''){
		$errors[] = 'Username is blank';
	}
	if($email == ''){
		$errors[] = 'Email is blank';
	}
	if($password == '' || $c_password == ''){
		$errors[] = 'Passwords are blank';
	}
	if($password != $c_password){
		$errors[] = 'Passwords do not match';
	}
	if(count($errors) == 0){
		$xml = new SimpleXMLElement('<user></user>');
		$xml->addChild('password', md5($password));
		$xml->addChild('email', $email);
		$xml->asXML('../plugins/simple_members/' . $username . '.xml');
	}
}
			echo '
			<h2>Simple Members Administration</h2>
				<table>
					<tr>
						<th>Username:</th>
						<th>Email:</th>
					</tr>';
			
			$files = glob('../plugins/simple_members/*.xml');
			foreach($files as $file) {
				$xml = new SimpleXMLElement($file, 0, true);
				echo '
				<tr>
					<td>' . basename($file, '.xml') . '</td>
					<td>' . $xml->email . '</td>
				</tr>';
			} 
			{
				echo '</table>';
			}
			echo '<br />
			<h3>Add a new Memeber:</h3>';
				echo '<form method="post" action="">';
					if(count($errors) > 0) {
						echo '<ul>';
						foreach($errors as $e) {
							echo '<li>' . $e . '</li>';
						}
						echo '</ul>';
					}
				echo '
					<p>Username <input type="text" name="username" size="20" /></p>
					<p>Email <input type="text" name="email" size="20" /></p>
					<p>Password <input type="password" name="password" size="20" /></p>
					<p>Confirm Password <input type="password" name="c_password" size="20" /></p>
					<p><input type="submit" name="add_user" value="add_user" /></p>
				</form>';
		}
		
//Display Login Form
		function members_content($cont) {
			//Login Process
						$error = false;
						if(isset($_POST['login'])){
							$username = preg_replace('/[^A-Za-z]/', '', $_POST['username']);
							$password = md5($_POST['password']);
							if(file_exists('plugins/simple_members/' . $username . '.xml')){
								$xml = new SimpleXMLElement('plugins/simple_members/' . $username . '.xml', 0, true);
								if($password == $xml->password){
									$_SESSION['username'] = $username;
								}
							}
							$error = true;
						}
						
			global $data_index;
			//print_r($data_index);
			if (!isset($data_index->members_enable_protect)) {
				//get_page_content();
				return $cont;
			}
					
			if (isset($data_index->members_enable_protect)) {
				if ( (isset($_SESSION['username'])) && (file_exists('plugins/simple_members/' . $_SESSION['username'] . '.xml')) ) {
					return $cont;
				}
			}
			
			if (isset($data_index->members_enable_protect)) {
				if( (!isset($_SESSION['username'])) || (!file_exists('plugins/simple_members/' . $_SESSION['username'] . '.xml')) ){
				?>
                <form method="post" action="" name="login">
                <p><?php if($error != '') {
						echo '<div style="margin: 10px; height: 20px; text-align: center; background-color: orange; border: 3px solid yellow;"<p>Sorry, the credentials you\'ve entered are invalid.</p></div>';
							} 
				?>
						<p>Username:
							<input type="text" name="username" size="20" />
						</p>
						<p>Password:
							<input type="password" name="password" size="20" />
						</p>
				<p><input type="submit" value="Login" name="login" /></p>
				</form>
				<?	
				}
			}
		}
			
//Members enabled checkbox
		function members_protect_toggle() {
			global $data_edit;
			$checked = '';
			if (isset($data_edit->members_enable_protect)) {
				$checked = 'checked="checked"';
			} 
			 {
				 echo '<tr>
				 			<td><b>Members Only?</b> <input type="checkbox" name="s_enable_protect" value="1"';
								echo $checked .'/>';
							echo '</td>';
				echo '</tr>';
			 }

		}

//Process Members enabled checkbox
		function members_protect_toggle_save() {
			global $xml;
			if (isset($_POST['s_enable_protect'])) {
				$note = $xml->addChild('members_enable_protect');
				$note->addCData(1);
			}
		}
?>