Open Photo Editor 
(Start -Programs - Microsoft Office XP - Tools - Photo Editor).
Find your photograph
(My example will be of my granddaughter)

Using the SELECT tool select the face and shoulders
Go to IMAGE and Click on CROP
Select the OVAL button

Click OK

Select the SET TRANSPARENT COLOR Tool
Click on the white oval

Click OK

Resize the photo so that it is 150 pixels in height
Go to IMAGE - select RESIZE
change the UNITS to Pixels

Click OK

Give the file a NEW NAME and save it as a GIF.
File - SAVE AS... - Select your folder - change the file name and type.