When you dress your avatar, do you hit wear or save? Saving just saves it as an outfit for later. If you want to show it to other people you hit wear when you are done. If that does not work for some reason, on the front page of the wardrobe, there is a blue box that has a link to convert your avatar. Click that link and try again.

You hit the button that says "wear" But I do see your avatar now so something worked!