Ah ha! Actually you can do it from iPad, which is how I turned into Mt Everest. I will have to remain Mt Everest for now as my old avatar isn't on my iPad!
I went to
http://www.picresize.com and resized a piccie on my iPad camera roll to Custom Size 100 x 100 pixels - the maximum allowed for an avatar. Then, clicked on the save to disk option which puts the picture into a new web browser page. Click and hold on the image to get the Save Image option which puts it in the Camera Roll. Back to Bright Eye and click on the Choose Picture option. Ta da!
Dave
Edit: to copy a picture from a web page to the iPad camera roll: 'click' and hold on it then select Save Image