An X-Face is a header in email messages and Usenet posts encoding a 48x48 B/W image. When a message contains one, some email programs can display the image as an icon showing in picture form who the message is from. You can learn more about the X-Face header by following the references in the Wikipedia X-Face entry, and you can make your own using the Online X-Face Converter.

After you create one, you have to configure your email program to add a custom header in outgoing email in order for other people to see it as part of your message. To see images encoded in X-Face headers of messages you receive, you have to use an email program that supports it (like Sylpheed or Claws-Mail) or install an extension that'll do it for you (like Mnenhy for Thunderbird and SeaMonkey).

This one is mine, and it's embedded in every email message I send.