Hmm...what if you duplicated one of the payment modules for offline payments, e.g. cheque/money order, and then put some kind of code in to tell the mod to automatically select that option and skip step 2 of checkout if the order total is 0...does that sound like it could work??? If so, I can try and play around :)

Even if we can't get it working so that it skips step 2, just having the option of Store Credit at checkout as a payment option would probably make things much clearer for the customer...unless of course their credit doesn't cover the whole purchase, then they might choose that option still when really they should be choosing credit card or whatever...hmmm...my brain hurts now ;)