Kurt has posted one of the explanations here
http://www.comebackalive.com/phpBB2/vie ... hp?t=10817
What I have found is that when people try to "Upload Avatar from your machine" because they don't have a place to host it is not working. That may be what Kurt is referring to when he says you need to have a valid email address.
What I have been doing is hosting the avatars on my photobucket site and then sending the links to people.
When you get the link you just have to cut and paste it to "Link to off-site Avatar" and then your avatar should show up.
If you need an avatar hosted just send me the picture, if you try both options and it still does not work PM me and I will help figure it out.