LightDM is a lightweight display manager that has been made default in Ubuntu 11.10 Oneiric Ocelot, replacing GDM.
And replace "/usr/share/backgrounds/warty-final-ubuntu.png" with the exact path to the wallpaper you want to use for the LightDM background.
3. Save the file and log out.
The above instructions assume you're using Unity Greeter, the default LightDM greeter (theme) in Ubuntu 11.10 Oneiric Ocelot. If you use a different greeter, like for instance LightDM GTK Greeter (package name: lightdm-gtk-greeter), search for it's configuration file under /etc/lightdm/ and edit that file instead of unity-greeter.conf.