User Roll Editor (WordPress Plugin) lets you assign permissions to users via an easy toggle box interface. “Read Posts” is an option there, so you should be able to assign that permission to only people logged in under a certain roll. You can set the default log in roll to contributor, for instance, and manage that rolls permissions so they can’t post but can read content.
As for front page login forms, in my opinion the best one out there is Simple Modal Login (WordPress Plugin), it’s very attractive.