Avatars have been greatly expanded. There are hundreds of new avatars available plus you have the option to upload your own image. To change your avatar, click the "Profile" link (upper/right of every page when you're logged in), click the "Avatar" link at the bottom in the forum section.
From there, you can browse the new avatars we have by clicking "Click Here to Select an Avatar".
If you want to use an existing image on the web, you can enter the image url next to "Enter URL of Avatar on Remote Server to Use:" and click its update button.
If you want to upload an image from your computer, click the "Browse..." button, find the image on your computer and select it (and click the file dialog's open button) and click that update button.
The avatar you set for the forum is also used in your blog, but it is not used for blog comments. Since blog comments can be anyone in the world (not just mybasic users), we can't use the same avatar. However, the blog comments uses
gravatars - a global, internet-wide avatar system tied to an email address.