I'm fairly sure this was unintentional on part of Apple's programmers though disappointing to have a feature lost in the update - but there is a fix.

Go into "Macintosh HD/Library/User Pictures". You'll notice that this is where the default user icons are. Any images you put in here will show up as default icons in System Preferences.app. You must quit out of the System Preferences.app. before adding new pitures.

You can use the default image cropper/scaler panel in the Accounts prefpane but it doesn't anti alias as well as photoshop (or maybe I'm too picky). I prefer a resolution of 72 pixels per inch and size of 36 x 36 or 48 x 48. Use the default user icons as a good example to follow. I hope this helps!

Here's a screenshot of what my user icon looks like. Notice, no more white-square background on it.