I had the same problem at first. When you open your folder on your computer where your pictures are (usually "My Pictures") and double click on the picture you would like to use as your Avatar, it should automatically open in your default photo-shop program. When there, you should be able to crop it and save it with a lower resolution. This should make the photo smaller. My Avatar is 100x100 but 80x80 would work, too. Weirdly enough, my photo program will not let me save at lower resolution, but it will let me e-mail at a lower, customized resolution. So, I cropped and e-mailed my picture at the 100x100 resolution back to myself, then saved it from my email program. There is probably a better way to do that, but it worked for me.
