I have a site where I have edited the C:\DotNetNuke\admin\Users\App_LocalResources\User.ascx.resx file so that the "Add New User" fields are named the way I want them. Two of the things I changed were 'First Name' and 'Last Name' to be 'ID Number' and 'Company Name' respectively as these forms of information are more relevant to the site. It allows me to capture the ID number and pre-populate a UDT with a list of employees for the User. 

The problem is, how do I turn of the "Mandatory" nature of First Name and Last Name when I create the new user, as sometimes they wont have an ID number (First Name) until they have completed some other applications in writing and mailed them to my offices.

PKingenuity

This feels the wrong approach to me.

You want additional data along with the user's account.  I suggest you take a look at Admin | Manage Profile Properties.  There you can add new profile properties and make them optional/mandatory.

There are likely to be MANY places in the existong code of DNN and the modules that make assumptions about how to use First Name and Last Name.  Maybe you WANT the site to send out emails that begin...

"Dear 186 XYX Corp,"

... I'd be VERY wary of perverting the use of existing fields.