Instructions
Select your Avatar from the "My Xbox" menu. It is the second menu block after the game disc menu.
Scroll down to "Customize Avatar" and then to "Gamer Picture" on the Avatar Editor menu.
Choose a preset pose from the list, or press "X" for the Advanced Mode. In the Advanced Mode, you can move your Avatar into a specific pose and capture a special moment with the right bumper button.
Navigate to the far right and to the bottom to locate and select the rainbow backdrop after you have decided on a pose.
Press the "A" button on the green check mark to confirm the image as your Gamer Picture.