I made this plugin a while ago on my forum before you released it ozzy. Not sure if this is more simple or not.
Code:
if($vbulletin->userinfo['pmunread']){
$find = '<li class="welcomelink">';
$replace = '<li class="welcomelink">
<a href="private.php?"><img border="0" src="images/newpm.gif" width="22" height="10"></a>';
$output = str_replace($find, $replace, $output);
}