How do I create an Avatar?

You can't. Avatars and the editing of nicknames, birthdates and other information were disabled more than a year ago. They are making changes to profiles. No one knows when or if they will be enabled again.

You must visit the human settlement on Pandora. They allow some humans to use "avatars" that were grown in a lab from the species of humanoid know as the Na'vi. You will have to bring a lot of skills to the table to be qualified though. The Avatars are really expensive to grow and create. Best of luck to you buddy.

The Yahoo Profile was removed around 1/1/2015. They were supposed to move most of the features to Account Info under the Gear icon. They still have not done so. Right now you aren't able to edit your profile picture, nickname, gender, or date of birth from within your account settings.

You can change the "Yahoo Answers" nickname. Click on your avatar/name in the left column; click on edit preferences; and click on "edit" after the nickname. A popup will open allowing you to change the name.

Adding or changing profile pictures is on hold for now. Yahoo stopped that about 18 months ago, supposedly they will let us change or add again some day soon.