I have tested and you cannot use a transparent image there, but if you look at Post #23
Removing Picture Frame On Startup/Login Screen
Danny has a Authui.dll file edited that removes the picture and the frame made up, you need to give yourself permission, take ownership, renamed the Authui.dll to Authui.bak.dll and put the Authui.dll that Danny made in C:\Windows\System32, look at post #6 of this thread
Basic Networking Information it will show you how to give yourself permission, take ownership, rename the Authui.dll anywhere it says shell32.dll you will be using Authui.dll
If you need any help let me know.
Jerry