The art direction was pretty much flawless, the colours were lusciously gorgeous, and the mesh between CG-world and live action film was fairly seamless (except for a few shots in the beginning and a couple near the end when they showed people fighting in the robots and their motion was just a touch jerky and not as weighted by gravity -- but that's just me being a prat)
I loved the design of Pandora as a whole; the creatures believably belonged with the "people" race (who, as Wikipedia tells me, are called the Na'vi) and felt like they were supposed to look that way in that world. I even almost got over the subtle hints of "furry" laced in their overall design because they embodied such a graceful balance between clean, elegant lines and an untamed wildness in their look. Their neon-mint-and-aqua-blue world punched with shots of magenta, electric plum, and pure cad yellow was to die for. It also worked really well in contrast to the flat, dusty yellow-grey-green of the invading army. The CG on Jake Sully's legs was especially convincing of his existence in a wheelchair without getting too obvious about it.
The story, however, was a different matter.
In terms of storytelling technique, I will not deny that I was completely absorbed into the moment of what was happening. The choice of shots and camera angles, lighting, colour design, etc. were stellar decisions in terms of revealing and concealing to maintain interest in the plot.
Unfortunately, I have to be completely honest in saying that the story was a little unoriginal. There were scenes in there that looked like something straight out of Pocahontas (specifically a couple scenes in the beginning with the male and female protagonists walking on tree roots and learning about each other's worlds). Take the idea of invasion and clashing of worlds from Pocahontas with The Matrix's fantasy technology, add a dash of Tarzan's theme of nature vs. human greed, throw in an extravagant budget, and voila! you have Avatar.
There were also parts in the script that removed me from the narrative a little, when it got a little corny with the over-the-top one-liners and catchphrases.. though I guess I should have seen that coming from the guy who directed the Terminator (which I have absolutely no qualm with). Not that there's anything wrong with over-the-top one-liners, but they always seemed to pop up in the middle of an otherwise very moving moment.
The characters were also a tad cookie-cutter. I think Cameron could have pushed character complexity a little with such a fantastical story setting. The character hierarchy almost too closely resembled the one in Atlantis.
Overall, the movie was pretty excellent for production and art, and the message is congruent to the current trend of environmental themes. But take away all the glitz and glam of the latest and greatest in CG, and you'll find that the story substance and content has kind of been done.
I give it 7.5/10 just because it was so beautiful to watch.