You will need a photo editing program. I photo does not let you do a lot of things, wish it did but it doesn't I use Photoshop CS. Just check as some avatars have to be a specific size and may be limited in size to so you may have to reduce colours etc to get it to work.
iPhoto will let you do a resize via the constrain and "crop" menu, I believe. But it's very messy and inefficient. You'll need photoshop for sure. That's what I use anyway...
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