On any given day my avatar will be set as The Terminator, raccoon Mario from Mario 3, an etching of a cat, or Totoro. It just depends. Today I set it to a picture of me. For fun. See below.
note: I blurred out my less cool attempts at cool little pictures.
You can also set your iChat "status." This is just a little line underneath your name that lets everyone else know how cool you are because you are listening to --fill in the blank--
or, you can just write something.
Today mine was,
If you know this quote you get a star.
Below is a real, actual iChat with Brannon in three installments. He had set his avatar to an "N" today. I am still unsure of as to exactly the reason. But that is fine.