Instructions
Power on the Xbox 360 with no disc in the disc tray. This will pull up the system home screen, called the "Xbox Dashboard." Select the tab "Xbox Live" to pull up your gamer profile.
Select "Edit Gamer Profile." You will see a box that appears to the left of your Gamertag name, which is your current gamer picture. If you have never put a picture or symbol in this box, it will be a generic series of concentric circles.
Select the option "Change Gamer Picture." This will give you the option to switch your gamer picture that appears with your Gamertag to one of the symbols or pictures that you have in your collection. The Xbox 360 comes preloaded with a bunch of these pictures and you can get more by purchasing them from the Xbox Marketplace or by completing specific tasks in certain games.
Select the option "Change Personal Picture." This will give you the option to use a personal picture that you upload to your computer or take with the Xbox Kinect camera. This picture will only be seen by you and anyone on your Friends list. To the rest of the gaming community, they will see the Gamer Picture that you set up in the preceding step.