Aargh, forum really, really hates me. Alright, let's try again, only a bit shorter this time: you can do it with ordinary PNGs. Head to your Documents folder, then into My Games/GalCiv3/Factions. Here, you'll find four directories which will take the appropriate files as delineated below:
1. LeaderBGs: 1920x1080 PNG. These are the background (setting) files for the wide-shot portraits used while diplomacy is active.
2. LeaderFGs: 1920x1080 PNG. These are the foreground (race) files for the wide-shot portraits used while diplomacy is active.
3. Logos: 128x128 PNG. These are the racial logos
4. Portraits: 128x128 PNG. These are the smaller thumbnail images used for race selection, menus, and the like.
Any rate, you can drop in any or all you like, then head into the game and create your custom race using any and all of these images; they'll appear at the end of the lists. If you would like to reference Stardock's own images to compare dimensions and file formats, you can go into your Steam commons directory and, from there, Galciv3\Gfx\Factions to find the same four image directories. Theoretically, you could also drop your modified images in here, but that's just bad practice.
And five seconds of testing this gave me this wonderful piece of art:
So, enjoy. And congrats on baiting me out of lurker status for my first post, like, ever.
EDIT: Good heavens, those images are huge. Turned to links, I think. Really wish I could preview posts.
EDIT 2: Really, *really* wish I could preview posts. Fixed.