I've noticed that with the registration plugin enabled, people are able to use the same username as eachother, so say there are 2 people who want the name BobSmith, the first will get that name and the second will get BobSmith-1, and a third would be BobSmith-2, etc.

Is there an option to disallow duplicate usernames?

If the first Bob Smith gets "BobSmith" and the second one gets "BobSmith-1" then they are not duplicates.

Sure, but that's just semantics.

I'm asking if there is an option to - instead of creating a BobSmith-1 automatically - have the user see an error like "sorry, that username is already taken" and have the chance to select a different username.