PHP Sessions w/ AJAX: Login Process
$("#login_form_header").submit(function(event){

    event.preventDefault();

    $.ajax({
        url: 'xhr/login.php',
        data: $(this).serialize(),
        type: 'post',
        dataType: 'json',
        success: function(result){
            if (result.success){
                window.location = "logged.php";
                return false;
            };
        },
        error: function(e){console.log("Could not retrieve login information")}
    });

    return false;
});

<?PHP

# Start the user session
if(!isset($_SESSION)) {
    session_start();
};

# Make sure form data was passed to the script
IF (isset($_POST['username']) && isset($_POST['password'])){

    # Connect to the database
    REQUIRE('../../../../db_oystrr.php');

    # Define variables
    $given_username = $_POST['username'];
    $given_password = $_POST['password'];
    $given_username = stripslashes($given_username);
    $given_password = stripslashes($given_password);
    $given_username = mysql_real_escape_string($given_username);
    $given_password = mysql_real_escape_string($given_password);
    $matched_username = "";
    $matched_password = "";


    # See if there is matching info in the database
    $sql = 'SELECT username, pass FROM users WHERE username="'.$given_username.'"';
    $result = mysql_query($sql);
    while($row = mysql_fetch_assoc($result)){
        $pass_hash = *********;
        if ($pass_hash == $row['pass']){
            $matched_username = $row['username'];
            $matched_password = $row['pass'];
        };
    };


    # If there was a match
    IF ($matched_username != "" && $matched_password != ""){

        # If there is only one result returned
        $session_sql = 'SELECT * FROM users WHERE username="'.$matched_username.'" AND pass="'.$matched_password.'";';
        $session_result = mysql_query($session_sql);
        $returned_row = mysql_fetch_assoc($session_result);
        $user_check = mysql_num_rows($returned_row);

        IF(count($user_check) > 0  &&  count($user_check) < 2){

            # Set our session values
            $_SESSION['id'] = $returned_row['id'];
            $_SESSION['last_login'] = $returned_row['last_login'];
            $_SESSION['username'] = $returned_row['username'];
            $_SESSION['signup_date'] = $returned_row['signup_date'];

            session_write_close();

            # Set users last login date and time and re-hash their password to this login
            $this_login = **********;
            $hashed_password = **********;
            $update_sql = '************';
            mysql_query($update_sql);

            echo json_encode(array("success"=>"user logged in", "session"=>$_SESSION));
        }ELSE
            echo json_encode(array("error"=>"More than one user with the same information.  What did you do?!"));
    }ELSE
        echo json_encode(array("error"=>"Invalid login provided."));
}ELSE
    echo json_encode(array("error"=>"You must enter a username and Password."))