MSN Avatars, or display pictures are pictures or graphics that are MSN conversation windows. They are not in all versions of MSN, only MSN 6.0 and up. You can find some that I made in the Graphics section of my site, or you can try to make your own. I suggest using PSP because it's much more easier to operate and cuter than using Microsoft paint, however any paint shop will work. This is the system of steps that I use when I make my avatars.
1) Size ~ First you will need to size the canvas(or whatever you call it=P) that your going to create your avatar on, the size will be 100 by 100 pixels.
2) Paint Fill ~ If you use PSP there are TONS of cute little paint fills or designs that you can use, and it's very easy to use them. Once you open PSP, click on the flood fill button located between the airbrush and the font. Along the color pallette(probably on the right side of the screen) click on the square underneath it. This will allow you to change the color=D If you click on the arrow in the lower righthand corner, you will get options for your flood fill. However, if your using Microsoft paint the only choice you have to use, is a basic color fill.
3) Graphic ~ After you get your background cute, you can add a graphic to make it cuter =D I usually use dolls, but you could also use any other graphic. You'll probably want the background of the graphic to be transparent. You can find out how to create a transparent graphic at Yummielicious, by clicking here and checking out Transparency under Tutorials.
4) Writing ~ The final step I use when I create an MSN avatar is adding writing. Alot of times I prefer to use a custom font, because there usually a lot cuter than the basic ones. You can download custom fonts at Font Freak