The BuddyPress Extended Profile component lacks native handling of Image type fields. The BuddyPress XProfile Image Field plugin allows users to add fields of type Image to user profile forms without having to edit any of the BuddyPress core files.
The images are stored by default into /wp-content/uploads/profiles/[USER_ID] directory. Where [USER_ID] is the id of logged in user.
Download: http://wordpress.org/plugins/buddypress-xprofile-image-field/