I could be wrong, but from what I could see in the installation files, Avatar seems to be using the Dunia engine, which was put to good use with Far Cry 2, and it looks mostly very good. The physics on the vegetation are very hit and miss, because it's so dense probably, but the art direction is great, it looks almost as good as the jungle sections of Crysis in some instances (I said almost), and it seems very well optimized (it ran without a hitch at 1680x1050, all settings to max except no AA or vsync).
The game seems to be fairly open, it's not as linear as you'd expect something based on a movie, and there seems to be a quite a few vehicles that can be used. The controls seem to be pretty good too, it's definitely more responsive than other 3rd person games like Resident Evil 5 or Dead Space for example. As far as the story itself, I have no idea what it will be worth...
Here are some screens (some of the quality was lost when scaling them down):
