kdm themes can be created by creating an XML file that follows the specification in $KDEDIR/share/apps/doc/kdm/greeter.dtd. Theme files are stored in the directory $KDEDIR/share/apps/kdm/themes/theme_name. The theme directory should contain a file called KdmGreeterTheme.desktop which has similar format to other .desktop files and looks like:

[KdmGreeterTheme]
Greeter=circles.xml
Name=Circles
Description=Theme with blue circles
Author=Bond, James Bond
Copyright=(c) 2002 Bond, James Bond
Screenshot=screenshot.png

The Name, Description, Author and Copyright fields can be translated just like in other .desktop files. All the files that are mentioned should be in the theme directory itself. The Screenshot field points to a file which should be a 200x150 screenshot of the theme in action (it is OK not to have one, but it makes it nicer for the user). The Greeter entry points to an XML file that contains the description of the theme.

Once a theme has been fully tested, make a tarball that contains the directory as it would be installed to the $KDEDIR/share/apps/kdm/themes directory. This is the standard format for distributing kdm themes.