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I believe webshots has a utility you use to upload pictures there. As for making one your avatar webshots won't work because they do not allow remote linking. You need a host for that. Often your isp will give you 5 or 10 meg of webspace for a personal website. All you do it upload your pic there then put the address to it in the avatar box in your 'my home'. So if my avatar was located at http://www.the-graveyard.net/files/avatar.jpg that is what I would enter to have it show up.
If that sounds too confusing you can just e-mail me whatever pic you want to use and I can host it for you and send you the addy.