How to change Rs to Indian rupee symbol (Devanagari letter “र”) at product display page?

Don't change code at all. In the admin panel, go to System > Manage Currency > Symbols.
There you should see all currencies used by your store and you can change their symbol.
But you should use the Unicode character “र” instead of a GIF.
Indian Currency symbol unicode : ₹

Below character encode should work in magento to display Indian Rupee sign.
&#8377 = र
₨ = ₨

i.e. &#8377 1,300 displays र 1,300.