OK! I've come across some TestStand installations that behave differently. A .NET top level dialog cannot be covered up although; there are some TestStand installations that the sequence opens a top level dialog and it stays behind the TestStand user interface. Other cases I see a .net login dialog that opens from a TestStand frontend call back sequence and it is on top and active and I can type my user name in without using my mouse to activate the window. Other TestStand installations I have to click the window with the mouse to activate it. All .NET assemblies and sequences are the same it has to be something different in the installation or OS configuration.
Can you share screenshots of the examples you stated, What version of teststand are you trying to install? What is the OS?
Windows 7 Pro Service Pack 1, TestStand 2013 184.108.40.206, Visual Studio 2012 Pro version 11.0.61219.00
Thank you for the image, I have to say that this is the first time that I see that sort of login. Have you tried the following Knowledge Base article: http://digital.ni.com/public.nsf/allkb/4979F8FDB7ED698B8625712B000CFD14. I might help you.
I don't use .NET, but there is a known TestStand 2012/LabVIEW 2012 bug with Keyfocus (which is a property for bringing the cursor into a specific control for entering info for a dialog box). I usually need to add a 50ms wait before trying to keyfocus on a specific control, but I have observed keyfocus working sometimes on some systems without a wait.
Are you also using the TestStand modal dialog? That should also force your dialog box to be selected rather you needing to click on the window.