Can someone explain this. I don't see %username% or %computername% in the code they gave.

http://unattended.msfn.org/unattended.xp/view/registry/35/

What's the question, specifically? Those hex values change the name of the My Computer icon to say %username% on %computername% (those are inbox system variables that will resolve to the logged on user name and the computer's name).

It's there, but the unicode values are converted to hex before being written in a .reg file (admittedly not a particularly easy format for a human to read)

The first part (LocalizedString) is "%USERNAME% on %COMPUTERNAME%" and the other (LocalizedString) is "%computername%".