When you create a logon, the image you specify is copied to an area of your disk (C:\ProgramData\Stardock\LogonStudio Vista\Logons). You can modify the original but it will not affect the saved copy. You can modify the copy, but you should not make changes that affect its name or size.
When you apply a logon, certain system image resource files are modified to contain a copy of the image. Most of the complexity of LogonStudio comes in doing this automatically in a way that doesn't result in a security breach. The end result is a resource file that has the pre-existing security applied but with your custom logon screen rather than the default.
If you delete a logon in LogonStudio Vista, that removes the files associated with the logon from your computer. It does not remove it as the current logon screen - once applied, the images are loaded from the resource file. However, if you uninstall LogonStudio, the uninstall code will be triggered and the logon screen will be reverted to the default from a system backup, just as if you had double-clicked the default logon screen.
Using an built-in logon screen is similar, except that LogonStudio Vista does not maintain a separate copy of the image file. These logon definition files contain a reference to the existing image files. If the files concerned do not exist, the logon will not be offered. One built-in logon that will not be displayed on several computers is Media Center, as that only comes with certain editions of Windows Vista.
The user image is defined by each user and is not modified by LogonStudio Vista. You can try to set a totally transparent user picture by clicking on it in the Start menu and selecting to "Change my picture" - however, this does not appear to work, instead resulting in a white image. It is likely that removing this would require editing the layout description file, which LogonStudio Vista does not currently attempt.
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THe developers know how it works, but we here are just users. Sorry.