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The Xsplash I'm talking about is called PackoXsplash HD and comes in two versions:
xsplash ubuntu karmic customPackoXsplash HD

To install it, simply extract the archive to /usr/share/images/xsplash (make sure you open Nautilus as root, by using the following command: gksu nautilus).

Of course, you can also use one of the images in the archive (the one suited for your screen resolution) as your wallpaper.

Download PackoXsplash HD