I created a new Plugin for WordPress that uses 0gravatar.com to generate an image of the user’s display_name if they do not yet have a Gravatar. This Plugin replaces the get_avatar function in pluggable.php to pass an alternate image to gravatar.com to use if they do not yet have a gravatar.
Comment on this post with an email address that you have not setup a gravatar on and see how it woks.