I think there is a difference between adding a pic in the profile section , to adding an avatar.
If I register on my sites (have many of them), the pic that goes in the sign up gets added to my profile, but I still have to go to 'avatar' under dashboard and manualy select which pic I want there. Not sure the two are connected.
As for videos, if they are not processing, its more than likely either your server setup, your admin permissions, or clashing with other mods, although Ive never had the latter and run lots of video heavy Dolphin sites.
Check your admin permissions are all set correctly administration/tools/hosttools
also, check what the max file size for uploading is set to on your server, if its small (which generally is as default) then anything bigger will just try to process forever...
90% of the time Ive had video issues, its been with server config, the last 10% has been me.