I think the following really needs to be part of the main help section and not just in the FAQ. Even after asking for help in Steemit Chat I was still confused about setting up my images until I read the FAQ entries below.
How do I change my avatar image and other profile information?
Your profile info, avatar image, and cover image are set in your Settings page. In order to update your avatar picture and cover image, you will need to host the images somewhere. This can be done by uploading it to a Steemit comment or post, or using a third-party image hosting site such as Postimage. Once your image is uploaded, copy its URL and paste it into the "Profile Picture URL" box for the avatar, or the "Cover Image URL" box for the cover image. Then click the Update button and enter your password or active key.
What is the recommend size for the cover image?
The cover image will be resized/scaled depending on the device being used. Therefore it is recommend to use an image that will still look good when cropped or resized. A 2048x512 image is the optimal size to work for most devices.