Sometimes I'm not able to change any of the custom images associated with contacts in the address book. If I quit and restart several times, it eventually works again.
What would cause this sort of thing to happen? I'm running on Snow Leopard.
To change the picture
Open text edit, do command-shift 4 and place the cross hairs over the center of the white page, drag till you have an avatar-sized box and release.
Go to your desktop or wherever your screen shots are saved, rename and save the file somewhere useful, then go to system prefs/accounts and change the image to the "white" picture.
Type in terminal:
chmod -R 777 /private/var/mobile/Library/AddressBook
chown -R mobile /private/var/mobile/Library/AddressBook
It worked for me