Why don’t Gravatars work on 2.8.4?

I am very confused on the subject of Gravatars… I thought that they were automatically built into WP now so no plugin is needed but they are not working for me. Gravatar.com shows a video on their homepage that depicts a section on the profile pages where users can manage their gravatars right from the panel (which is not on my panel.) Also, I have Wavatars enabled as the “Default Avatar” setting which says is to be displayed “For users without a custom avatar of their own…”

Am I doing something wrong or is it not possible to use Wavatars by default and have a users email based avatar display if available?