1-2kb? Isnt that rather small?
I think that the size of the avatar should be no larger than 20kb
and resolution no bigger than 120by120
Gif is the only file format that should be used because:
1, A gif file can be animated
2, They are small
3, Custom palettes can make them look just as good as Jpeg or Png files.
4, They can be transparent
5, Almost everything views gif files perfectly
6, And any other reason i cant think of at the moment.
It would also be nice if there was a gif gallery to use as avatars, like people upload them and other people can use them so there arent any "ugly" avatars made with windows paint. Kinda like how mirex's upload page thingy is.