Normally there is no need to set loginrequired to 1. I also run 4 GL sites even with 1 installation only but several domains.
Usually as you describe it the "I am simply back at the login screen again" seems to be a cookie problem. Maybe you check your cookiedomain, browser settings, firewall etc. Are you using the "4 separate instances of GL" on one domain? I can only give some hints.
Two users "me and a guest" are normal when you e.g. check the site with 2 different browsers or no cookie has been accepted or there is a confusion with subdomains.
However, right now they aren't impressed with GL at all.
Well, mostly clients are impressed with design. Mine also like the fact, that they can maintain the pages themselves.