I'm fine with waiting till Mahz gets to the size, and he probably knows about this, but I just want to remind him and feel like I'm at least slightly helping:
It is easy to force pictures, such as the avatars, to be a fixed size once uploaded with the HTML code for an image:

<img src="[pic url]" width="[number pixels]" height="[number pixels]">
The square brackets are not included, I just have them so you can see.

Of course this could lead to some pictures being disproportionate (if they were not originally square), but if you don't want to go into code to detect the ratio, you could do one, or both, of two things: You could let users know that the ratio is forced to a square and recommend they upload square(ish) pictures, and/or you could give them and option to turn off the size-forcing, but then they would have to once again comply with the 128x128 pixel limit.