Avatar is a beautiful film set in the fictional world of Pandora, an Earth-like moon of a distant gas planet.
Pandora from space
The main conflict of the movie is a big evil corporation's desire to procure the "Unobtainium" which sits beneath the native's Home Tree.
3D Rendering of Home Tree
As for the experience of seeing the movie, 3D may just be the savior of the large format cinema. I saw avatar in both regular theater format and IMAX 3D format. The IMAX 3D was a more emotionally engrossing experience. The subtle details such as finger prints on glass or glistening of animals flank are much more vivid. Though it is better in IMAX 3D, Avatar holds up in either format. I saw it in the traditional theater format first, and liked it enough to see the movie again. However, now that I've seen it in both formats, I know I was missing a large portion of the 3D experience the first time.
Part of the reason the 3D experience is so important is that Avatar is the first feature length film to use pore-by-pore tracking for animating 3D characters. This technology successfully crosses the Uncanny Valley that so thoroughly ruined The Polar Express. There was no feeling of, "these are human-like undead wearing someone's skin." This allowed the successful integration of real imagery and actors with 3D generated imagery/actors (the split is said to be 40% real, 60% virtual). Avatar also introduced new behind the scene's rendering technology. The 3D action could actually be viewed in real time. This allowed Cameron to move the virtual camera to choose shots in real time as the actors were still doing the scene. More details on the technology and links to technical details can be found on the Avatar Wikipedia page.
On to the movie itself. At it's heart, Avatar is a story of love, war, and community. The story is highly archetypal and references many of the great films of the last two decades: Dances with Wolves, Braveheart, and many others. Some viewers may not like recognizing the elements of other films and books, but I would argue that every story can be said to reference others in some way. You'd be hard pressed to find a war and/or adventure story that doesn't reference the Illiad. What was most important to me is that the story is cohesive, engaging, and provides life lessons. The lessons I took away from the film, 1) be true to your values, 2) take the risks with the high payoffs, 3) don't try to kill a planet or it might kill you. Click here for more humorous life lessons. Overall, Avatar is a must see film.