Check out your site settings, and if the gdlib php module is installed on the server.
Quoting the FAQ:
"If you don't see anything on your user profile pages to let you upload user images then it's usually because GD is not enabled on your server. GD is a library that allows image processing.
- Make sure GD has been included in your PHP installation. You can check this by going into the Admin -> Configuration -> Variables page and looking for the gdversion setting.
This setting is chosen automatically every time you visit that page. If it shows GD version 1 or version 2 then everything should be fine. Save that configuration page and go back to your user profile. - If
Moodle thinks GD is not installed, then you will need to install it. On
Windows this is usually a matter of "turning on" the module in PHP (see
the installation instructions for help). On Unix you may need to re-compile PHP with arguments something like this (note the ones in bold):
./configure --with-apxs=/usr/local/apache/bin/apxs --with-xml --with-gd --with-jpeg-dir=/usr/local --with-png-dir=/usr --with-ttf --enable-gd-native-ttf --enable-magic-quotes --with-mysql --enable-sockets --enable-track-vars --enable-versioning --with-zlib - Remember to re-visit the Moodle configuration page after making any changes to PHP so it can pick up the correct version of GD."