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The User account picture can be removed by turning off the Welcome Screen. Or, by switching to Windows Classic theme. Follow the method described in this article if you want to remove the username and picture from the Start Menu, without disabling the Welcome Screen and Windows XP Theme.

For those who want to remove the user name and user account picture from Start Menu, in order to have a blank blue panel at the top, try this:
Start Windows Explorer and go to this folder:

C:\Documents and Settings\All Users\Application Data\Microsoft\User Account Pictures

From that folder, rename the BMP file which corresponds to your user account.
( For example, if your username is Robert, rename Robert.bmp to old_Robert.bmp )
Next, rename the following folder:

C:\Documents and Settings\All Users\Application Data\Microsoft\User Account Pictures\Default Pictures

to something else, say...

C:\Documents and Settings\All Users\Application Data\Microsoft\User Account Pictures\No_Default Pictures
To remove the user name, follow these steps

Start regedit.exe and navigate to the this key:

HKEY_CURRENT_USER \ Software \ Microsoft\ Windows \ CurrentVersion \ Policies \ Explorer
In the right-pane, set NoUserNameInStartMenu value-data to 1

Close Regedit.exe and restart Windows.

You'll end up with a blue space at the top of the Start Menu.