can this be used for the user picture in the user's profile?

This module only works with CCK fields. In Drupal 7, it's possible for FileField Sources to affect all elements that use the new "managed_file" field type, which can apply beyond the Field module, but even in D7, the user picture is not a managed_file element, so it doesn't work there either.

Unfortunately impossible in Drupal 6 and 7, unless you use an ImageField on the user (in which case FileField Sources works like it does for any other field).