I was having the same problem (Win7 64bit). Stardock Support had me try numerous things, but nothing worked. After more than 2 weeks of trying one thing after another, SD Support gave up.
Eventually, I found the default background hidden away in System32\oobe\info\backgrounds. Changed the name to backgroundDefault.jpg.bak, and LogonStudio starting working.
Sweet! I've been reinstalling programs after a recent hard drive failure, and LogonStudio would not work. Then I remembered I had to change something the last time. But what? Came here, did a search, and helped myself.
Then I hurt my arm, patting myself on the back................