Short and simple, is there any way you can use custom portraits(like in bg) in Neverwinter Nights.

No. Not nearly as easily. And you can't (again, easily) change a portrait once you make a character at the beginning. You more or less have to edit the game files for it.

So do you mean that you have to um... convert the portraits to a different file format or something.

Well, the portraits for NWN are in a totally specific format, yes. The size is different than for IE games, you have to have 5 different sizes of each, and every portrait needs a strip of empty space below the end of the portrait... It's hard to explain, so read this: http://www.sorcerers.net/Games/NWN/port_make.htm

Ok, thanks for your help.