This has been an issue forever I think. Try a gravatar. It works!
So, looking through the forums, it appears you guys have been trying to find a solution for over 2 months for this. Is it really that complex? I can’t imagine any other bug that could be worse on buddypress, considering uploading an avatar is one of the first things new members do, and many people don’t like using external apps like gravatar.
It doesn’t really give a good first impression of buddypress.
@junebob I agree it’s unfortunate, but this isn’t an error on other BP intalls. Just BP.org. Not to mention that most BP installs don’t have a million users the way BP.org does. I’m sure boone will eventually fix this too on BP.org.
It’s a problem with buddypress.org’s hosting situation. As @crashutah alludes to, buddypress.org shares user database with wordpress.org, which at the moment has pretty severe restrictions on the kinds of files that can be uploaded.
I’ve spoken with some of the staff at Automattic about the problem, and they’ve informed me that the general restrictions on uploads at wordpress.org will be lifted relatively soon. At that time, the avatar problem here will be fixed.
I can’t implement any other fixes on buddypress.org at the moment because of the fact that it’s running a WP 2.9.x installation, which must be upgraded before any more fixes go up. That upgrade process is going to be very complicated. I’m working on it.
In the meantime, I agree that it’s not a great first impression, but I encourage you to download the software and check it out.
Regardless @crashutah post and not being sure of the meaning of the word “alludes”, I hope @boonebgorges will find time to commit if not in trunk, in a branch a fix for avatar upload problem since my bp install has the same non functional image upload issue and has no common database `key` with wp.org or wp.com
@xsimo that generic non specific upload issue? I’m sure Boone will have endless fun committing a generic fix to cover a vaguely defined issue 
If you really want help, and not being able to upload avatars is fairly critical, I suggest you start a new thread and describe the problem you are having in as much detail as possible along with WP/BP versions and any plugins running.
I have multiple test installs and production installs none have an issue with avatar upload – however your server! can present issues if not configured correctly but that isn’t a fix Boone can commit.
As I stated above, the problem is not with the BuddyPress software, it is with the environment in which the buddypress.org website is hosted. It is a universal truth that websites will not allow you to upload files (like avatars) unless their permissions have been properly configured. In the case of buddypress.org, they are not (and they cannot be at the moment). It sounds like something similar is happening on your server.
