An avatar is an in-game representation of yourself--a digital version of you. Some choose to model their avatars directly after their real-life appearance, while other users go for a different look altogether. There are two primary avatars you can use for the PlayStation 3: one that is used for your profile on the PlayStation 3's CrossMediaBar (XMB) and another that is used in the massively multiplayer world of PS Home.
The default avatar displayed on your PlayStation 3 profile and XMB is a simple smiley face. This can be changed by accessing the PlayStation 3's XMB "Account Management" section under the "PlayStation Network" tab.
Select "Account Information" and then choose "Avatar." Here you can select from all your available avatar images. Dozens of avatar images are included free with your PlayStation 3, though you can buy premium avatars from the PS Store if you wish.
Once you've found a suitable avatar image, select it by clicking "X" and then confirm your selection. Your new avatar image will now be displayed in your profile for all of your online friends to see.
PlayStation Home is an exciting and innovative feature available only on the PlayStation 3 that allows you to roam free through an entire universe operated by Sony. With personal spaces, games and unlockable items, there is always something to do in the world of PlayStation Home. But first you must make your avatar.
Click on "PlayStation Home" under the "PlayStation Network" tab in the XMB to get started. If this is your first time using PlayStation Home, you'll need to download the files required to play before you can begin. Once you read the message of the day, you'll be transported instantly to your PlayStation Home Wardrobe. This is where you can create and customise your avatar.
This feature is actually quite comprehensive. The PlayStation Home Wardrobe features several preset avatars as well as the opportunity to make your own avatar. Using the saving and loading options means you are free to play around with your avatar and even create multiple versions if you'd like. Of course, you can customise all of the typical features of your avatar, such as sex, skin colour, hairstyle, and height, but you can also adjust other features in order to fine-tune your avatar.
A variety of clothing options are available for free in PlayStation Home, and even more can be purchased from one of several in-game clothing stores. Other clothing options can be unlocked through special events and games both inside the world of PlayStation Home and out.