Seems every body is having major problems telling how to change the Ugly Guy, I have found 5 different ways an none of them worked.
so here is my way to change Ugly Guy.
The “ugly guy” image is stored as a resource inside %WinDir%\System32\AuthExt.dll. Thus, in order to change the picture, a resource editor such as Resource Hacker (known as ResHacker or ResHack) has to be used, also you have to first take ownership or it will not work.
1.) locate %WINDIR%\System32\AuthExt.dll file.
3.) Run Resource Hacker or any resource editor such as Restorator, ResEdit, XN Resource Editor and etc.
4.) Open %WINDIR%\System32\AuthExt.dll file.
5.) Expand Image tree.
6.) Expand 1001 tree.
7.) expand 1033 ( you should see the Ugly Guy)
8.) click action
9.) select Replace Resource.
Click on Open file with new resource, and select a JPG image which has the resolution of 1280×1024 pixels.
Then, enter the following information:
Resource Type: IMAGE
Resource Name: 1001
Resource Language: 1033 (depends on your OS’s language and should be the same with original code)
Click Replace to make the change. Now you should see your new Image. Click save and exit. C+A+D and select change user
You should see your new image instead of Ugly Guy.