Here's what I did...
1. Found a picture of myself, cropped and resized it to 80x80
2. Uploaded the picture to my home website (seperate from GG, I didn't want to waste a pic in my GG portfolio section)
3. Came back to GG, logged in, clicked the edit button on the "Personal information, email, password, etc.", and put the website address into the box that says "URL to your picture (80x80 max pixels, may be smaller) (.gif, .jpg, .png accepted)"
4. Clicked "Submit" and It should appear in the "My Home" section if it worked. If it didn't work, you may have incorrectly put in the URL (web address) for the picture.