We would like DNN Admin to create one User ('SiteAdmin'). This user ('SiteAdmin')  should have the ability to to create multiple users ('Clients') in the DNN users data table.
'SiteAdmin' should ONLY have permission to create 'Clients' (i.e. User Accounts in the Admin menu) and have access to NO other DNN Admin functionalities (e.g. 'Site Settings', 'Pages' ...).

The profile for 'Clients' will also require some custom fields, like photo uploading.

Please advice how do we acheive it ASAP.

Thanks in advance

Look for Workcontrol User Manager. This gives the most granular control over which roles can edit which other roles.

As for the profile picture, there was a free addon for this that used to be available here: http://21fiveindustries.com/Downloads/tabid/53/Default.aspx

But the site is no longer there (perhaps someone knows the owner?) and there is also an issue that it does not resize on upload and people could therefore upload huge image files. The provided FCK editor is not suitable for the same reasons.

You could look at a custom profile module like Smart Thinker's User Profile, but it would certainly be far handier if photo uploads and associated resizing was simply included in the core.

Rob