The main reason avatars for the forums end up blurry is because the forum's automatic resizer is crappy.
Dont upload a 120x120 image, because it will end up blurry.
Use Gimp, Photoshop, Paint.NET, etc. to shrink it to 75x75.
After that, upload the avatar you saved.
I have examples, if you dont believe me.
Left: 120x120 Forum Shrinked Avatar (JPG)
Right: 75x75 Non-Forum Shrinked Avatar (PNG)