That's pretty standard functionality for most applications...

User names are not case sensitive, but passwords are case sensitive.

Is there any reason you need user names to be case sensitive?

All I can think of that may be causing this is that your users table defined on your database has the collation to something like SQL_Latin1_general_ci_as which is case insensitive accent sensitive. If you want to make username casing matter, you will need to modify the proper table and make the collation for that specific column (or maybe the whole table depending on what you prefer) be something like SQL_Latin1_general_cs_as (cs = case sensitive, as = accent sensitive).

Hope this points you on the direction you are aiming for.