Avatars are set in your Account Profile or Settings. You can go to your Account Settings by using My Account in the upper right of the home page and then select Account Settings.
Now go to the About You tab in the Account Settings dialog.
Go to the Choose File button on this screen, next to Photo:. This will allow you to pick a photo on your computer to upload as your Avatar. The only restriction is that the photo must not be larger then 115 picsels wide.
When done press the Save Information button.