The liveUSB above was created with Tazusb. If I use UNetbootin to create liveUSB out of the same .iso file, autologin works fine and modified desktop color appears correctly!

OK, autologin fails when I add an application to Openbox autostart. I'm running liveUSB created out of slitaz-3.0.iso. I tried a few different applications with the same result. Here is the line I'm adding at the end of autostart.sh:
(sleep 3s && /usr/bin/xterm) &

could it be related to this bug?
http://labs.slitaz.org/issues/show/287
slim execute the .xinitrc in you home directory to login, so if there is some problem with it then no login. did you have your home directory mounted somewhere when you ran tazusb? tazusb does not backup your home dir probably because your home would be in ram instead on the key, and this would be a problem in low memory systems. in my liveusb i don't have much files in home and i usually use pc with at least 1Gb of ram so i put home in intramfs, because i like boot computer and put my usbkey back in my pocket. you do it editing /usr/bin/tazusb and moving /home from the for cicle at line 487 to the find command at line 485.

It may have been related to directory structure. I was creating my liveUSB with UNetbootin, since I had some problems with GUI version of tazusb. Since then, I started using command line version of tazusb to create liveUSB, I changed FAT32 to ext3, and I don't have this problem any more. Thank you for responding to my message.