Yes I too had exactly the same problem as everyone else!
However I was able to solve the issue after some closer inspection of the plugin settings. So let me just clear up what I think the original poster was trying to tell the developer!
Firstly I should point out that this is indeed only a problem if you only have a Single User Admin Account! Now the problem with this is, user photo plugin doesnt recognise your default administrator, (you will notice this in the plugin settings after first activation, that there is no admin listed in the drop list menu for notification of photo uploads)
1: So to get around this problem after you activate it, you have to upload your user photo to the the default administrator via the edit user profile settings.
2: Then whilst you're still at the user management, you will have to add another account with Author level access (note: this is the default level of the plugin settings) So create your new user account accordingly and save!
3. Then logout and log back in using your newly created user account and go back to the user management profile settings. Then select and edit your default administrater's profile, scroll down till you see your uploaded photo, there you will now see a IMAGE PENDING NOTICE.
4. SO now you will be able to authorize your custom image for the default admininstrator. Then If you check your blog you should now be seeing your default admin's photo being displayed in the comments etc!!
Final note: Personally I find this annoying that the default administrator can not authorize is own image. lol However other than that small issue, this is a most excellent plugin. Thanks! :)