First off, use your photo editor to make one about 64 px wide. Mine is 64 by 58. Upload it to your web server.
Next, look at the window to the upper right. See where it says Forums My Profile Search Members? Click "My Profile."
Now it describes you. Along the left, in blue, it says "Edit Profile." Click this.
Fill in whatever you want to show.
Scroll down and you'll see a place to put the url for your avatar. Fill that in.
Click "Update Profile."