If you're always stuck on creating an affective, attractive avatar, then heres a nice, but easy way.

I'm choosing to make my avatar 96x96 pixels, this being the standard MSN avatar size.

Starting with a blank document i'm going to create a new layer (Layer> New> Layer...) and just quickly fill it using the Paint Bucket Tool().
You should now have a document starting like so:

Most of this avatar is going to be made up of a gradient (as the name sugests), so right click your new layer, then select Blending Options.
We now want to select Gradient Overlay.
Select these settings:

Don't worry about the colour settings thats next.

Now by clicking the shown area:
We can now set the colours and general look of the gradient, copy every setting from below if you wish to duplicate the avatar i'm creating, if you wish you can choose different colours.

1. Colours: #E85022 Location: 0%
2. Colours: #FB6D47 Location: 27%
3. Colours: #585858 Location: 30%
4. Colours: #474746 Location: 41%
5. Colours: #EE5126 Location: 62%
6. Colours: #FB6D47 Location: 67%
7. Colours: #F63E0D Location: 79%
Customisation of the Diamonds () will be down to you as me showing you would be too complicated.
You should now be left with something like the following:

No we have our basic background we're going to work on adding text.
Using a new feature from CS 2, i'm choosing to firstly use the pen tool to create a diagonal line where i'll then type my text.
Using the Pen Tool () with selected (found at the top) we want to draw a diagonal line like so:

We then use the Horizontal Type Tool ()to then click onto the line and type our text.
Mine now looks like the following (My text colour: #F06038):

Don't worry if your version of photoshop doesn't support this method, you should be able to find another way. (E.G. CTRL + T, then holding shift, rotate your already typed text.)

I'm now simply going to add an outer glow to my text with the following settings:

Using the same technique i've also added more text:

WE'RE FINISHED!

If you adjust this technique, the avatar can be unique everytime like below, i've also added an extra: