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ANIMATED Avatars Animation
http://www.osoq.com/edit-pictures-online/make-your-avatar.asp 

Build your avatars for free! Hundreds facial features (face, hair, eye, eyebrow, nose, mouth), clothes, glasses, headwear, accessories, background for you to choose. Both static and animated pictures. Size options: 192x192 pixel / 144x144 pixel / 96x96 pixel. Use it for your blog, web site, messenger display picture, instant messaging, email, greeting cards and much more.

Avatara
http://avatara.com/
Avatara is a little different. It is a full body, 3D avatar of yourself. You can easily link the 3D image to Facebook, MySpace, Blogger, and Wordpress among others on the list. Joining is as easy as an email address, password, and security code. You get the option to choose from a blank avatar, pre-made, or upload a photo of yourself, but photo specifications are very specific.

Be Funky
http://www.befunky.com
Photo effects for your photos. Cartoon, sketch, stencil, pop-art. Turn your photos into digital artwork, 147 effects.

Build Your Wild Self
http://www.buildyourwildself.com/ 

Let your wild self loose! On the website Build Your Wild Self, kids can create hilarious images of themselves. Start by building your ordinary self, choosing gender, hair color, eyes, mouth etc so that you get a picture that looks just like you. Then take your pick from the wild parts – perhaps you would like elephant ears, or frog arms? Or a crocodile tail? Then choose a background for your avatar – a forest or the sea, perhaps?

Create My Picture
http://www.planetcreation.co.uk/createpic/ 

Create My Picture has a vast selection of facial features along with attributes including hair and jewelery accessories that will ensure anyone can fine horn a character to suit there needs.

Gizmoz Animate yourself!
http://www.gizmoz.com/newsite/presite/home.jsp 

Our tools allow for users to create and personalize a realistic 3D avatar from a single face image. We provide an API to allow our photorealistic head reconstruction capability to be part of any real-time application such as games and virtual worlds.

M&M Avatars
http://www.mms.com/us/becomeanmm/create
Add arms, legs, eyes, etc. to a m&m character.

MakeMii
http://www.makewee.com
Make avatars like on the Wii.

Makeup Photo
http://makeup.pho.to
Make a person in your photo look like a model in a glossy magazine! Apply eye and skin makeup, whiten teeth, remove imperfections, and add a special touch to your photo with a dreamy soft focus effect. All enhancements are made automatically - just upload a photo and enjoy the magic change!

Meez
http://www.meez.com/
Meez core Avatar technology allows users to create a digital representation or identity. They can exported to social networks, virtual worlds, gaming sites, instant messaging platforms and mobile devices. Avatars can be customized with physical attributes, clothing, accessories, popular branded items and animations or actions.

MessDudes
http://www.messdudes.com
Design your very own Dude or Dollz from hundreds of different body parts, clothes, items and backgrounds to express your personality and mood!

Mii
http://www.blogcdn.com/www.joystiq.com/media/2006/10/mii.swf
Mii's just like on the video games!

Mini-Mizer
http://www.reasonablyclever.com/mm2/index.htm
Picture yourself in plastic!

Mr. Picasso Head
http://www.mrpicassohead.com/create.html
make your avatar, kind reminds me of Mr. Potato head.

My Avatar Editor
http://www.myavatareditor.com
Older students might enjoy this one. Create and edit personalized avatar characters compatible with Mii™ characters found on the Nintendo® Wii™

My Oats
http://www.myoats.com
My oats is a place where you can create simple or complex designs, shapes and patterns. The designs that you create can be: Downloaded as an image. Downloaded as a transparent png. Saved to your personal account, which allows for editing and re-saving. Made into a wallpaper.

Portrait Illustration Maker
http://illustmaker.abi-station.com/index_en.shtml
Portrait Illustration Maker is a service which provides character icons completely free of charge! They are available for your blog site or SNS. If you’d like to save the completed avatar, right-click on the icon. And then select "Save Picture As… " from the menu.

Voki
http://www.voki.com/ 

Create a representation of yourself (avatar). Choose hair color, eyes, clothes etc. Then you can add your own voice to your avatar and embed it on your blog, wiki, or webpage

Wimp Yourself
http://www.wimpyourself.com/
Your students will love creating a cartoon-looking character of themselves. Very easy to do and does not require a login.