Originally Posted by Mo'Phat

Open MS Paint, open the pic you want to use, go to Image, then click Attributes. It'll say how big, in pixels, your picture is. Divide 64 by the largest dimension (64x64 being the maximum Avatar size here), eg. A picture that's 400x600 pixels, divide 64 by 600 and you get .106666. Now get out of Attributes, go to Image, then Stretch/Skew. In the Stretch section, replace both 100%'s with 10.66% (move the decimal place), and bang, you've got a reduced picture. Save it as a .gif and upload it as an avatar.

I'm sure there are better ways to do this, since MS Paint generally sucks, but it works.