People have talked about avatars for a while now but have never seen a simple and fun way to create your own until I came across voki which allows you to not only pick from a number of templates but also full customise every aspect of the image from facial hair to background to accompanying "bling" and you can even add a voice / song audio - you can then post the results of your efforts to any blog or a number of social networks. If you look at their blog people have created avators for a variety of people from Barrack Obama to Alicia Keys and there are multiple other applications.

The site is hugely popular and has been nominated for the South by Southwest Web Awards - have a play with it - I did - the results are featured to the right of this post - I just wonder if the Second Life effect applies here ie I read that although 70 odd % of users are men 70 odd % of avatars are female - go figure as they says in the US!