It works, it just is too small to show up, when I need to upload a small avatar to a thread, I do it the way you just did, then I click on the little X and a window will show a menu. If you choose "properties" it will give you the address, copy that as I have just done, and it will provide the link:
http://www.yorkietalk.com/forums/att...a6_avatar2.jpg
Clear as mud?