Uploading a user picture fails when the openid_sreg module is enabled. It appears the cause is the call to _user_edit_validate(), which is called with the same temporary path to the uploaded file a second time by openid_sreg_user(). By then, the image has been processed and so validation fails.
This same code in openid_sreg results in 2 other bogus messages about missing username and e-mail values, even though they are existed and were stored properly.