The film is set in the future where us earthlings are seeking new frontiers in space. The planet that the creatures live on contains a rare and expensive substance called unobtainium. The humans are evil and want to get rid of the locals from an area of the planet important to the locals but which contains the substance. The humans send in Avatars of the locals by some strange technology, and try to infiltrate them, one of the Avatars go native and the whole thing kicks off.
I have read on the internet that the film seems to be very simalr to the Pocahontas (See http://www.geeksaresexy.net/2010/01/03/james-camerons-pocahontas-avatar/) but who cares it is a good story.
I was rather sceptical that the film would not be all it was cracked up to be. There was a lot of hype and a lot of technology, so I kind of figured it would be like all those other films that are all flash but no substance.
I have to say I was pleasantly surprised.