I just checked it and it worked like a charm!
You have to rebuild the entire site after saving the updated profile so it will parse the new nickname, but it added a little icon next to my name no problems. I got the following on the bottom of my posts
posted by Medic119 Image at 16:50This would be a great way to create avatars for people with accounts! Just use the code without the name and change the MT template to use the nickname instead of the login name.
BTW you can also use a straight path so you don't have to keep making icons for each author.
EX:
Nickname field:
CODE
John Doe <img src="/your path/admin.gif" border=0 alt="admin">