Is there a way to extract the existing portraits (PCs and NPCs) the game uses so that I can see them in explorer?
Yes there is, first you need "Zanes Dat Extractor" There's a link in the modding tools section of the downloads page. You also need a .rar extractor to unpack it. Then drag and drop ToEE1.Dat onto the dat extractor, and wait (or make yourself a cup of coffee) while it creates copies of the contents into a new folder. When it's done open the folder ToEE1/art/interface/portraits there you will find a whole bunch of .tga files. Use photoshop, quicktime, or something else that can read .tga's to see the pictures.