Once downloaded, you open the program. Then click file, open and find your desired image in your computer. Open it. On the right hand side there is a slider this is the resizer, this will scale the image up and down. You can also choose to crop the image with the "Crop image" tickbox. This is highly recommended.
The images will be saved in: Documents\Neverwinter Nights\portraits
If you are using a Steam version of NWN EE you will need to save and add to your "PRT" files in your Steam\steamapps\common\Neverwinter Nights\data\prt folder.
It's come to my attention that some people are having issues with the Image Conversion Tool. There is another way to create portraits which may or may not produce the desired effect.
The five .tga files can be generated by Neverwinter Nights from a single image in jpeg format (usually indicated by the file name extension .jpg). This is done as follows.
Place the jpeg file (e.g. my_pic.jpg) in the portraits subdirectory of where Neverwinter Nights is installed (typically C:\NeverwinterNights\NWN\portraits\).
Start Neverwinter Nights, then start (or load) a game.
Enter the console command ConvertPortrait followed by the name of the image without the extension (e.g. ConvertPortrait my_pic).
Find the .tga files in the portraits subdirectory, zip them up into a single archive file, and share it with the community.