I dunno about actually recoloring the thing, but once that file's ready all you do is go to your profile and use the "Upload Avatar from your machine" option near the bottom.
To get an avatar, go to your profile at the top of the page, scroll down to the avatar control panel and click browse to use a picture from your computer.
Edit: Yoshi beat me. For the recoloring, couldnt you just use paint to change each color to the shade of blue you want?
To recolor, download and install the Gimp 2.0. Use the Select By Color tool turned down to minimum (slide the bar on the bottom all the way to the left) and click on a pixel while zoomed way in. Then use the Paint Bucket tool set to what color you want to change it to and click on that same pixel. Rinse and repeat for the other colors.