I do judge people by their avatar, but only if they're advertising things I really hate. For example, if it's Twilight-related, I generally regard that person as someone to be avoided. Same goes for Lady Gaga or any other similar "artist". I'm very opinionated.
I've never really thought about this issue at all. I do know I am sometimes perplexed when somebody's avatar doesn't quite live up to the work at the other end or it's not even their own image but just an expression of something they enjoy like a favourite show or something. You've got me thinking about my own now - what do people think when they see mine? Oh no! Waaah!
I never click on avatars just because of the avatar... D: I tend to only look at peoples gallery if I see their work first, or if I talk to them. :3 So, do I judge based on avatar? Not really. I just see it as something to entertain, amuse, and entertain me.