Instructions
Turn your PlayStation 3 on. If you have configured your PSN security settings to require a password, enter your password to log in.
Select your PSN user name on the left side of the main menu and push the triangle button on the controller. Select "Information" and push the triangle button again. This displays the picture that you are currently using as your avatar.
Push the "X" button to modify the information stored on your PSN profile.
Push the right directional button on the controller to highlight "Select from [Photo]" and push the "X" button. This displays a folder-based view of the photos stored on your PlayStation 3.
Navigate through the folders using the directional pad. Press the "X" button to open a folder, and then press "X" again to choose a photo. This returns you to the information screen for your PSN profile. The screen displays the new picture.
Press the circle button on the controller to return to the main menu.