here is what i do, keep in mind i dont use gimp i use psp, but my method doesnt require background removal...

when im taking an avatar pic in imvu with the imvu camera i use the button there to take the pic with no background, this saves the pic in your gallery as as png not jpg and everything but the avi/s is transparent, then i open the png in psp and copy it and paste it as a new layer on top of whatever background i want it on, this is the best way to get a really clean looking finished product without any kind of bleading or chopped pixels...

so i suggest redoing the pic as png, if theres no way you can do that then you are looking at promoting your image to a layer then using the magic wand type selector to select and delete most of the unwanted pixels then zooming in and dealing with individual odd pixels tediously then doing some sort of blur or smooth or resize to get rid of the chopped pixel look....

but that tedious stuff is not my specialty, who here uses gimp ? little help please ?? :-P