Ashok,
I just tested the login process. I was sent to a 404 error page at:
122.176.92.236/development/ChahatMiddha/...index.php?Itemid=464
Can you check your New User redirection setting in JFBConnect? When I went back to the home page, I was properly logged in. If you have any plugins meant for redirecting the user on login or registration, please try to disable those right now as well.
Finally, for setting the image you want to use on blog layouts, you'll want to add the {SCOpenGraph image=http://site.com/link-to-image.jpg} tag somewhere on the page. That will specify the image Facebook should use for posts to the user's wall (or Likes). Additionally, you can set the default image to be used on all pages in the Open Graph tab of JFBConnect using the "Defaults" box. Simply add:
image=http://site.com/link-to-default-image.jpg
Once added, the image there will be used on any pages where the {SCOpenGraph image=xxx} tag isn't used or JFBConnect doesn't automatically choose an image to represent the page.
Hope that helps!
Alex