Pseudonym and author photo

Entirely up to you. If so you could use your own or there's always stock photos.

Sure.

See?
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I use a photo for every pen name. Some of them are just not super recognizable as me, and others are photo manipulated to be more Avatar-ish than realistic.

Yes

SM Reine's a pseudo, but the stabby, cherub-faced sheila in the avatar is indeed me. I never leave my home office, so it's not like I'm afraid of getting recognized or something.

Same with me.  If people recognise me they've probably already been bored to tears with my tales of writing anyway.  They're still friends and family though   

I use a pseudo not necesarily for privacy but to keep my writing world and my lawyer world separate. So yes, I use a photo of me for my author photo. I don't care if people recognize me. If they do, it means they already know me and I'm not ashamed for them to know I write.

If I was using a pseudo because I wanted to keep the writing a secret, I'd probably use a photo of me that was unrecognizable, such as a cleavage shot (no head) or me behind sunglasses or something.

A good (and probably not very pricey) professional photographer in your area could probably help you set up a photo shoot with several very different "looks"/personalities, that wouldn't even be recognizable as the same person post-editing, as long as you gave them a head's-up ahead of time that that's what you'd like to do.  Just a thought.

But of course!

(See picture to the left)

You could also use your own photo and crop it to show only a portion of your face. Kind of like Seth Godin shows his head only from the eyes up. It is a great way to brand yourself, or pseudo, if you always use the same shot, as Godin does.