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If you install it, open the picture up go to 'Image' (in menu at top) select 'Resize/Resample' then input the size you want in the box.The maximum avatar size here is 125x125 pixels.
Then save the file and upload as normal.
What type of image can be used for the avatar? It wont accept jpeg, bitmap, any ideas not sure how to do this, I have resized but cant find a file type that is acceptable.
If using Win XP search Micsft for a power tool (can't remember name), is free and great but does not work on Vista.
In Vista I go into my photos and right click and I have the option to resize enter 125 as pixel size.