Hi All,
Thanks for all the help the below is my final mark up of the code minus the hash function on the password data,

Code:
  Private Sub btnLogin_Click(ByVal sender As System.Object, ByVal e As System.EventArgs) Handles btnLogin.Click
        'create connection string and connect to db
        Dim conn As SqlClient.SqlConnection
        conn = New SqlClient.SqlConnection
        conn.ConnectionString = ("Data Source=ALEX-LAPTOP\SQLEXPRESS;Initial Catalog=sldb;Integrated Security=True;Pooling=False")
        Try
            conn.Open()
        Catch myerror As Exception
            MessageBox.Show("Error Connecting to Database: " & myerror.Message)
        End Try

        'create query, execute and put into reader
        Dim selectAdapter As New SqlClient.SqlDataAdapter
        Dim sqlselectquery = "SELECT username, password FROM Users Where username='" & txtUsername.Text & "' and password='" & txtPassword.Text & "'"
        Dim selectCommand As New SqlClient.SqlCommand
        selectCommand.Connection = conn
        selectCommand.CommandText = sqlselectquery
        selectAdapter.SelectCommand = selectCommand
        Dim selectData As SqlClient.SqlDataReader
        selectData = selectCommand.ExecuteReader()
        'check for correct credentials
        If selectData.HasRows = 0 Then
            MessageBox.Show("Invalid Login Details", "Login Error", MessageBoxButtons.OK, MessageBoxIcon.Error)
        Else
            currentuser = Me.txtUsername.Text

            'run update query to update logged_in field to true
            conn.Close()
            Dim updateAdapter As New SqlClient.SqlDataAdapter
            Dim sqlupdatequery = "UPDATE Users SET logged_in='True' WHERE username='" & txtUsername.Text & "' and password='" & txtPassword.Text & "'"
            Dim updatecommand As New SqlClient.SqlCommand
            updatecommand.Connection = conn
            updatecommand.CommandText = sqlupdatequery
            updateAdapter.UpdateCommand = updatecommand
            conn.Open()
            updatecommand.ExecuteNonQuery()
            conn.Close()
            Dim homeform = New frmHome
            homeform.Show()
            Me.Visible = False
        End If
    End Sub
This works perfectly and i have also modified the select query to work on the home form to decide whether the user is an admin or not and display the admin button.

For the hash function should i have a registration form which hashes the user's password when it is added to the database? Is this enough or do i also need to hash the username aswell? Also as for the data stored in the database other than the authentication data, should that also be hashed or is it OK to just display it as text? This would be people's personal details and information on when they took leave in their work place.

Thanks!
Alex