The permissions-related message looks rather harmless. This, on the other hand, 
looks like something that could cause the problem you're experiencing:
QFSFileEngine::open: No file name specified

I can't reproduce this issue in KDE 4.1.1. Could you upgrade with the 
instructions provided here: http://www.kubuntu.org/news/kde-4.1.1 and retest 
the issue?
You shouldn't need to use sudo to start systemsettings since there will be a 
password prompt when you try to enter the login manager module.

** Changed in: kdebase-workspace (Ubuntu)
   Importance: Undecided => Low
       Status: New => Incomplete

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cannot change kubuntu kde 4 login screen background image
https://bugs.launchpad.net/bugs/241928
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