Others have had this problem and many an answer has been given in the forums. A Google search for "show user picture on start menu" gets the widest range of answers. Surprisingly none of them mention one of the simplest answers of all as I found after hours of search and experiment. The answer lay in ensuring you had activated "Use visual styles on windows and buttons" in System Properties. To check that you have it activated right click on Computer. When the System Properties pane opens left click on the advanced tab and then under "Performance" on the "Settings" box. When the "Performance Options' pane opens left click on the "Visual Effects" tab. If the "Custom" settings have been chosen scroll to the last item in the list and ensure you have clicked on "Use visual styles on windows and buttons" so that it is activated. Your chosen picture in the User Accounts section of the Control Panel will then be shown at the top of the start menu pane.
A different method of getting the same result but losing the benefits of your other custom settings is to go to Desktop Properties and under the appearance tab choose Windows XP style in the "windows and buttons" box.