If you have that size pic in one of your folders than you should just be able to hit browse, double click it and than save or whatever. I'm pretty sure at least... hmm.. I'll go check.
If you use the instructions in this post: "I don't know how to make an avatar by redchicken" then they will direct you to a totally different site to make avatars which works so much easier and faster. http://www.shrinkpictures.com/ Follow those instructions and it will work- I did it!