When you find the avatar that you would like to have right click on it and then go to save as in the grey box. It will pop up a save as screen, the default setting should already be the avatar gallery. If not you will have to choose that, the path is c:\Program Files\VPlaces\exts\gallery. Once there just click save.
Now you are ready to wear the avatar. To do that you will have to either double click on yourself or right click, then choose edit identity. Under the picture of your current avatar you will see a place to mark stock or personal, mark personal with your mouse. Directly under your current avatar will be a button that says change. Click that after marking personal. You will see the group of avatars you have for wear in your file then. Just click on the one you want and then click ok twice and you should have changed your av.