Avatars are excellent for online education. They provide the human interaction that is natural in classrooms and in the traditional learning environment.
I teach students online. Message boards, email, and instant messaging are great tools for writing. But what about voice communication! Posting a question on a message board is useful but many times asking the question is better. It is instant, direct, and uses the nuance of voice. Skype works well but avatars are better.
Avatars provide a face to the students and a face to the teacher. They provide the human element to online teaching.