Well, for one not everyone uses the exact same server setup, OS, Settings, or software. If you would like I will setup a server just for you to try this on my configuration or even give you the install CD so you can setup a box on your own to see what it really happening with the average server (Linux).
This is a problem for many of the users running this software and I have found that the site person either do not know how to modify the software to get around this, just make it so that you have to make your avatar an exact size, ignore the appearance of the crappy looking avatar distortion, or just plain don't use avatars at all when they come across this problem as they don't want to be bothered with fixing it or asking how to fix it.
This day and age everyone wants avatars so it has become a major concern in many places.
I do not have a non modified version of the
UBB.threads at this time handy to be able to find the code that is the problem as I have modified every one I have as soon as I download it and test it for bugs and related problems before going live with it or I would post the file and code direct where the problems are coming from. I do know it is 2 distinct files that need to be modified striping out the code mentioned above.