Thanks for your response. I think that all it would take to pull down the user profile avatars is an extra parameter or two added into the existing Twitter API call, then extracting the URL's to the avatar images from the returned data. I've been experimenting by hacking the plugin code and I've got back URLs to the avatars.
But since I didn't write the plugin it's going to be pretty difficult to integrate the code changes in a robust way. For example it's not clear to me how the caching is working in the plugin. I would really like to see the avatars added (with a widget option) by the StudioPress team instead of myself :)
The Twitter-provided embedded timeline widget has serious drawbacks-- namely that it is very difficult to style the widget (for example larger font size or profile avatar images) since the widget loads in an iFrame. The font is so small I can barely read it on my screen.