Timezone Dropdown List in User Account
User register forms are built by the User module, but the timezone widget is added by the Locale module through locale_form_alter() (an implementation of hook_form_alter()). 

The Drupal community suggests leaving the core files alone (see Do not hack core). If you want to change the form, just write your own implementation of hook_form_alter(), and add/edit the available values using the form API and the "select" form field.

There is a nice tutorial at Brenda Boggs blog.