Hi there! I've currently got a problem where users (even I) cannot change their avatar. For some reason, they can't even go to /index.php?account/avatar. Interestingly, editing avatars from the admin panel does work. Both internal_data and data have been recursively chmodded to 777, and avatar permissions have been set to allow.
Here's what it looks like when you try to edit your avatar:
Unless you are denying those in the Registered group the permission to upload avatars, having 0 set for other groups shouldn't be a problem. Everyone should have the Registered group as their primary user group and the highest numerical permission for all user groups that a user is a member of will apply.