No point in writing too much about the plot of Avatar - either you'll go and see it and I'll ruin it, or you don't want to know about it at all. Being a former Physics student, though, I could go on for hours about the 3D effects.
Ok, so here's how you make a flat screen appear 3D. Project two images onto it, each taken by a separate camera. When filming, ensure the cameras are separated by a certain distance - logically about 10cm, like my (and most likely, your) eyes, but practically a bit more. Then ensure that the audience is wearing a pair of glasses that shields one projection from one eye, and the other projection from the other. Lo and behold, bullets and arrows appear to be flying out of the screen straight at you.
They used to do this with red and blue glasses, but that means the colour perception all goes to crap. So they've done it with polarised light instead. The simplest way to demonstrate how the light is being blocked is to go to the cinema with a friend, wear 3D glasses and then look at each other and wink. One of their eyes will be partly shaded, and the other will be completely blocked out. Now wink the other eye, and the blocked out eye switches over on your companion.
Polarised light, to my mind, was light that vibrated in a certain plane - for example, one eye got images with photons that wobbled up and down, and the other got images with photons that wobble side to side. What this means is that a sheet of tiny slots, either horizontal or vertical, would only let one set of light through. But apparently that means if you tilt your head so the glasses are on a diagonal, you miss both sets. So most 3D images in cinemas use clockwise and anticlockwise polarisation, at which point I have no idea how it works. But it does, very effectively. It took a few minutes to get used to, for me, and then everything had an added dimension.
One thing that needs improving. Real cameras don't focus on everything in the shot, so although you might want to explore an image that's 3D, there's still only a limited area that you can focus on. Things that are very close to the camera are blurry, and because the effect of the 3D makes you think it's closer, you'll want to try to look at it and make it focus (which of course you wouldn't do on a 2D image). It won't. I haven't seen any of the Pixar 3D films yet, but I'm imagining they won't have this problem, as they don't use real cameras. And the broader landscape-type shots don't suffer too much from this. Try and get a spot near the middle of the cinema too. I don't know, but I'd guess this helps a bit with the overall effect.
The film's plot is generic, slightly hippy in places, full of cliches and stereotypes and really, Unobtainium? But I was drawn right in, rooting for the giant smurfs throughout.
But Toy Story 2 in 3D will be better.
