I have my old Avatar folder that was used when ppl uploaded through there profile.

Now that I have FAP they can set there avatars in FAP.

Does FAP resize the photo and save it in the avatar folder used for the PHPbb Forum? If not I was going to delete the old avatars in that folder.

Yes, if you have allowed avatars to be created from user's images they will be resize and place in the avatar folder.
But I would not remove any existing avatars that are still in use by any user.

Thanks Artie! Exactly what I needed to know!