BuddyPress.org

Sorry, forgot to add the details:

1. Which version of WordPress are you running?
3.7.1

2. Did you install WordPress as a directory or subdomain install?
Directory

3. If a directory install, is it in root or in a subdirectory?
Root on server / subdirectory on localhost (I have two copies for emergencies like this but this time both are behaving badly)

4. Did you upgrade from a previous version of WordPress? If so, from which version?
Yes, 3.6.1

5. Was WordPress functioning properly before installing/upgrading BuddyPress (BP)? e.g. permalinks, creating a new post, commenting.
Yes

6. Which version of BP are you running?
1.8.1

7. Did you upgraded from a previous version of BP? If so, from which version?
1.8

8. Do you have any plugins other than BuddyPress installed and activated? If so, which ones?
Yes: AddThis Social Bookmarking Widget / BuddyPress Template Pack / Edit Author Slug / Login With Ajax / Popular Widget / Video Thumbnails (disabled all plugins save for BuddyPress and the behavior continues)

9. Are you using the standard BuddyPress themes or customized themes?
Customized

10. Have you modified the core files in any way?
No

11. Do you have any custom functions in bp-custom.php?
Yes (2 lines - excluding php open and close tags): 

<?php
add_filter( 'bp_use_wp_admin_bar', '__return_false' );
define ( 'BP_DISABLE_ADMIN_BAR', true );
?>

12. If running bbPress, which version?  Or did your BuddyPress install come with a copy of bbPress built-in?
Not running bbPress

13. Please provide a list of any errors in your server's log files.
None

14. Which company provides your hosting?
nearlyfreespeech.net

15. Is your server running Windows, or if Linux; Apache, nginx or something else?
Linux: Apache (both localhost and server)

I have also just removed the avatars folder and it does indeed create one as well as the userid folder although that remains blank (no files are placed there) and the same error as my original post appears. Hope that helps in solving this.