I would recommend against using a pop-up unless you feel there is a strong need for it. The "pop-up" paradigm is often inappropriately used on many web pages. The pop-up should be used only when it is very important to maintain the user's context outside of what you are doing.
There are two styles of login. Either you have "login-as-navigation" where clicking on the login not only validates your credentials, but also takes to another area which is only available to authenticated users. If your application uses the "login-as-navigation" then it almost certainly should not use a pop-up: the context is changing and there is no value, and possible confusion, in making a pop-up. The other style is "login-as-exposing-capabilities" where you are on a page, and logging in leaves you in the same place, but more capabilities are exposed to authenticated users.
If you have "login-as-exposing-capabilities" a case might be made that the user sees they are on a particular page, and logging-in is a relatively small change of state. A pop up makes it clear that after logging in they will remain on the same page. But how valuable is this? Logging-in is a distinct and separate interaction, and generally a user does not need to see the page (underneath the pop up) to log in. The advantage of clearing the screen and presenting a solitary log-in box is that is it entirely clear to the user that this needs to be done. I would say it probably depends upon the specifics of the site, but there is no general benefit of one way or the other.
What generally drives this is more technical/security reasons than usability. My experience has been that such pop-up mechanisms cause compatibility problems with browsers, with the particular mode of the browser, and with other scripts. I have seen pages that fail to completely refresh to match the new authentication state -- part of the page reflecting a logged in state, while another reflects the anonymous state. These are bugs, to be sure, but you are opening yourself up to these bugs if you expect to load a page that must transform itself between authenticated and non-authenticated mode. Since authentication is a key part of security, a bug with this capability is particularly dangerous.
Given the tradeoffs, I would choose to keep the authentication as simple and clear as possible, navigate to a screen that only does authentication, and then navigate back to a screen that is rendered while your authentication state (and user id) is well known and stable. The slight advantage of usability of a pop-up does not out-weigh the dangers.
