It would be nice if users in your contact list had avatars
We have thought about that in the past, however it has not been implemented due to the additional traffic incurred. This feature is on our very-long-term TODO.
Additional traffic problem could be addressed through optional avatars.
I wouldn't mind having them cashed on the device. Usually they don't change that often. :-)
avatar suppor has been implemented by Jan (not sure where his branch containing that code is), but needs some more work before being pulled into master branch... I'll ping Jan about it and see if he is willing to improve :)
What's the status of it?
It is 75% done, as of a year ago. Needs some DB rework and could be merged then.
Will XEP-0054 (XMPP vCard) be supported in the future? if it is supported, avatars will work too.
XMPP Client can add an option to set whether download avator automatically or not.
Also add an item to contact's long-click menu, call it "Info Query" for example, if user click it, client will download user's vCard, including avatar.
There will be no additional traffic unless user initiate the query.