In SharePoint 2010, for security reasons, master pages are not applied to the application pages AccessDenied, Confirmation, Error, Login, RequestAccess, Signout and WebDeleted, instead you’ll have to create a new custom application page and run the power shell command Set-SPCustomLayoutsPage.(source - a must-see):

In WSS3.0 and MOSS2007 it was a real headache to customise pages such as the Access Denied page or Sign Out page without editing the out of the box SharePointRoot files.
In SPF2010 and SPS2010 this has changed with the introduction of PowerShell commands to point the location of the application page to a newly created customised one.
Get-SPCustomLayoutsPage -Identity "AccessDenied | Confirmation | Error | Login | RequestAccess | Signout | WebDeleted
"Following PS Command replaces Request Access Page (reqacc.aspx) in layouts folder, assuming customized version of Request Access page is deployed to custompages folder under layouts directory
Set-SPCustomLayoutsPage -Identity "RequestAccess" -RelativePath "/_layouts/custompages/reqacc.aspx" -WebApplication "{replace with web app url}"

So, don’t change the files (error.aspx, login.aspx etc) in C:Program FilesCommon FilesMicrosoft SharedWeb Server Extensions14TEMPLATELAYOUTS, but use them as templates for the new custom pages