There are a couple of tools available out there which help you create Avatars. And for those who still live in caves, this is what an avatar is:

An avatar is a computer user’s representation of himself/herself in two-dimensional icon (picture) used on Internet forums and other communities

So if you already have one and are thinking of getting it modified or design from the scratch then I found this great web app that lets you do this for free! Its really interactive and you can get your favorite avatar designed within minutes! 

You can decide what to wear, your facial features, glasses, hair, accessories and what not! All with a few clicks and it’s done!

Here’s what I made in around 2 minutes

The design studio is pretty neat with web2.0 graphics: