You should have that capability already. Go to User CP and you should have an option on the left that says Edit Avatar. From there you should be able to upload an Avatar from your computer or from a website.
I would be interested if you cannot access this feature, let me know if not.
There is a "stubborn" radio button which says "do not use avatar" which cannot be turned off. There do not appear to be any choices which allow one to be uploaded. I can PM my password if it would help to log on as me.
Thanks for bringing this to our attention, it must be a settings problem for all but the Admin and Mods members group since you should see a Custom Avatar section below the do not use avatar radio button. I will look into it.