Hi, I am using the freichat on my site and I really enjoy it. My question is, how can I get the messenger/chatbox to display the actual users profile avatar as opposed to the default?

Yes you can, Probably there is an option to select the avatar in the backend.
by the way, which platform did you integrate FreiChat with?

I am using Elgg.

If you can point me in the right direction on where to manage this, I would greatly appreciate it.

You will need to edit the query in the file freichat/server/drivers/Elgg.php that fetches the users
so that it also fetches the avatar url .

Else , you can wait for it to be added in the upcoming version .

so what would I exactly change it to once I arrive at Elgg.php file?

You may check the other drivers present in that directory(JCB.php and Jsocial.php) and change it accordingly