GRUB2 Splash Images Must be DirectClass
Just a quick note that might save someone out there time. If you've upgraded to GRUB2 and can't get your custom splash image to work, try making sure your image is DirectClass
$ cd /boot/grub/images
$ convert robin.xpm -type truecolor -depth 8 robin.png
$ identify robin.png
robin.png PNG 640x480 640x480+0+0 8-bit DirectClass 26kb
If you don't specify the "-type truecolor" you'll get PseudoClass, which will silently not work.
Here's a article on how to upgrade to GRUB2 and enable splash images.