Alex space and time are the same thing. Inflation does not break any laws of physics. Inside a promordial universe undergoing inflation light still travels at the speed of light. It is the space time construct that is expanding 'faster' than light. It has no meaning as there is no reference.
It is a bit like a barrel roll in an aircraft. You experience 1g yet the aircraft has just done a 360 degree roll.
http://www.youtube.com/watch?v=tOZEgKXJMCE
Bert