Mac OS X Lion by default displays the user name in the Menu bar. When displaying the full username, you might find the menu bar bit crowded. Mac Lion allows users to display icon instead of name using User & Group Preferences.
Click the User name and select Users & Groups Preferences from the menu list.
Click the Login Options available under the Users & Groups and select Icon from the drop down list for Show fast user switching menu.
Now the menu bar would display the icon instead of the user name as shown below.