illegal username character

Hmm, I'm not sure it's the @. I don't have any problems with it. Can e-mail addresses contain other non-standard characters?

I just did create the new user and it worked fine, so I still don't see how this is an issue with the @. If you look at the function user_validate_name(), you can even see that it explicitly allows for @ in the regex:

  if (preg_match('/[^\x{80}-\x{F7} a-z0-9@_.\'-]/i', $name)) {
    return t('The username contains an illegal character.');
  }

Ahh, ok; we should trim those out then. : D

+1 to #7.

People that uses the gmail '+'-extension to their emails cannot change password, because username is invalid, and they can't change username. So admin has to manually go in & change it for them.

Not sure why the idea didn't come to me before, but I was able to solve this by adding a customer property to the Commerce Order entity property info that sanitizes an e-mail address for use as a username. This involves trimming whitespace off the ends, replacing illegal characters with hyphens, and trimming the final result to the maximum username length. I pulled these from user_validate_name(), though I didn't accommodate everything it does as some things just won't validate for e-mail addresses to begin with. We can always update this further in the future if we need to.

Once you update to this commit, you'll need to clear your cache so the default checkout completion rule updates or update it yourself to the new property (commerce-order:mail-username) if you've already edited it. I think we should also consider a similar property for customer profiles that creates a more human-friendly username from a customer's first and last name.

Commit: http://drupalcode.org/project/commerce.git/commitdiff/59275da

Follow-up issue posted here: #1444696: Add a customer profile username property that turns the full name into a username

I think this is a problem with core. I've created an issue for this, here:
https://drupal.org/node/2157963