Zombie, I opened my picture in Microsoft Office Picture Manager. Went to "Pictures" pulldown and selected "Resize". Typed 90 and 90 in the size settings and hit "ok". Then went to "Pictures" and selected "compress" and picked the bottom option (email messages) and that got it down to under 6k. Saved as a Jpeg. Don't know what all works, but BMP doesn't.
Then went to the profile settings for avatars and selected upload and browsed to the location I saved to on my machine.