You need to make sure your images are:
1) the correct resolution. (320X200) - the size of the actual picture, including free space.
2) the correct pallet.
3) the correct Image size (aprox 60X105) - this is the size of the actual person/paperdoll.
4) the correct position in the image. (get this wrong, and your picture will be covered by the inventory slots/floor space)
Also, are you referring to the Inventory Image or the actual Battlescape Sprite, cause they are two totally diffrent things.