I've noticed that when I try to upload a .gif image from my saved files, it won't work and if it has a transparent background, it looks all black.
The solution to this is simple. Upload whatever picture you want to use to photobucket, tinypic, anything that provides a direct link. Not the img code. Upload it, and then copy the direct link. If you're using photobucket, it'll look like this- {x} Tinypic should be something similar.
Anyways, copy it then go to profile>avatar. Under where it says "upload from your computer" or something like that, there's a box where you can paste in an image link. Since you have the direct link of your picture copied, push ctrl + v to paste it or do it manually by right clicking the box and clicking paste. Click save and it should be there.