Perhaps your avatar was disallowed when the system was put into place. I'm not sure how long you've been a member or when the system was initiated, but if you didn't meet the minimum criteria at that time, it would have been disallowed until you did have the minimum amount of rep power and posts.
As far as your password goes, my understanding is that some members have to change their's as often as 45 days. I think that depends on how you login, how old a member you are, how secure a password you have, and the settings Davey Boy has set for us all. I believe you can continue using the same password if you wish; just enter the same one when it asks for a new one.