Wordpress is integrated with gravatar.com to display your globally recognized avatar.
To assign avatars to your users or various admins, first make sure that each of your users has their own profile. You can create new user profiles in the "User" section of admin.
Next, sign up for an account at http://www.gravatar.com using the same email address that was used to create the User profile in Wordpress admin. Upload an image to gravatar.com. This gravatar image is now associated with that specific User and their image will appear next to the content they post. This image will also appear when the user posts comments on other Wordpress blogs (as long as they use the associated email address when commenting).
In Wordpress Admin, navigate to: Appearance -> Widgets. Drag the widget titles from the lists on the left side to the "Sidebar" sections on the right side. You can also drag and drop the widgets up or down within each Sidebar to change their placement above or below other widgets.
The featured image can be added when creating a new post. In the right sidebar of the post creation page in your admin panel, at the very bottom of the column you'll see a link to "Set Featured Image".
Click this and follow the instructions to select an image from your media gallery, or add a new one.
Once an image is selected some fields will open up that will allow you to create a title, hover text, etc. These fields may be disregarded. At the bottom of the page is a "Use as featured image" link - click this and your image has been set.
Logo: 386W x 80H
Featured Images: 298W x 291H
Create a New page and assign it to "Blog" Template. Template selections are found on the right side of the Page Edit screen under Attributes.