OK I created the recordset and edited the server validation server behavior as you said. What next? I brought up the registration form to test (users_Registration_Simple.php), filled in the form and all it told me was that the email address I used is already registered. That's really the point. I want to use existing email addresses of current members of the organization (along with their password) to get them broader access to the members-only sections of the site.
Also there is a red exclamation mark next to the Universal email in the server behavior panel.