chembron the rogue border appearing under your login box is caused by the other image file that the BM custom login plugin uses (called 'login-bkg-bottom.gif' - you'll see it in the folder where you placed your personalised background). I guess the simplest way to remove it from your login page would be to overwrite the existing gif with a blank gif.
If you can brave some css work then instead of editing the gif edit the following files:
From each of the files remove the line:
background:url( images/login-bkg-bottom.gif ) center bottom no-repeat;
That will remove your stray gif file.