Visit Config > People > Avatar Selection > Manage Avatars
Click "edit" next to "Available to all roles" (although you CAN use the rows below to add avatars just for specific roles, such as Teens or Kids).
Click the avatar you wish to edit, then the "edit" button. If you wish to delete it, scroll to the bottom of the "edit avatar" page and click the Delete button.
To add a new avatar, visit Config > People > Avatar Selection > Upload. Use the upload image to select the avatar image from your computer. You can check the Roles boxes to add the avatar only to certain roles, or just leave that blank so everyone can choose that avatar.