Here's a few interesting things I found regarding using custom login screen backgrounds on Windows 7. So I'm sure most of you are familiar with using custom backgrounds on the Windows 7 login screen. If not, check out this article.
Well I recently found this thread that gave instructions on removing the 256kb file size limit for custom Windows 7 login backgrounds. This can be very helpful if you want a higher quality background.
And on that note, if you want a lossless background on your login screen, all you have to do is change the file extension of any png or bmp file to .jpg and stick it in the folder %SystemRoot%\System32\oobe\info\backgrounds with the filename backgroundDefault.jpg just like you would normally. The background should display properly without any loss in quality.