Yes, participants (or their parents) can upload an image to replace their profile picture.
They can also:
Change their fundraising goal.
Change their performance estimate (if performance-based pledges are enabled for the fundraiser).
Change their participant message.
Here's what it looks like on the participant pledge page:
Here’s what it looks like on the bottom of the main campaign page (if the participant list is not hidden):
Admins can change any participant image by going to the Groups & Participants tab and clicking on "Manage Participant".
How it works for a participant to change their own image:
When participants receive their invitation email, there will be a special link for them to upload an image. No account creation or passwords are necessary.
Here’s what it looks like:
Once they click on that special link, it will open their private Manage Participant page where they can customize their pledge page: