I have a SK account I transferred to Steam well over a year ago.
However, for some unknown reason, when I attempted to start up Spiral Knights today the option 'Use Steam Account' had vanished. Attempting to log on with my previous password and username details resulted in a message telling me that my account has been converted to Steam, and to select 'Use Steam Account'. The checkbox that was previously there has now been replaced by the 'Login as Guest' checkbox. I am booting up Spiral Knights using the Steam shortcut.
Am I missing something terribly obvious here?
Yes, restart steam client and try again. It's the most common problem with steam.