As far as I've understood you want to implement the service like 'Gavatar', am I right? If so, it requires a new plugin development. If I took you wrong, please provide me with more details on how this should work.

Basically I have a code to extract an image from a given name. For example let's say the user inputs "bob" as their username. My code would get the image "www.domainname.com/images/bob.png" and what I need it to do is to (if they don't upload a profile picture during sigh) set that to their profile image, rather than the default profile picture. 

Thanks for your interest, nearly lost hope on this topic. 

-Liam

Gravatar is already in store. And this is not a big deal when to make it as a plugin.

In other words I should just copy the Gravatar plugin and edit it's code?

EDIT: Looking over the plugin it seems as if it would be somewhat difficult to edit, judging by the fact that I A. Don't actually have a paypal account to purchase it and B. The plugin actually does nearly the opposite of what I need. I need a service that sets the users profile picture from a url upon sign up. I could maybe add a feature to the sign in page that allows them to download their generated picture but I would like to know if I can have this done automatically.

Thank you for the detailed explanation. In this case you should develop your own plugin, that will grab the username and according to it add the specific avatar.