Rare says that the silly old Xbox avatars are getting an overhaul for Kinect. They told OXM that their lanky, non-manly bodies will become more realistic. Rare senior programmer Nick Burton says that they'll essentially be Avatar 2.0.
Expect to see more realistic porportions that work better with the hand-eye coordination you'd expect when using Kinect's motion-sensing tech.
I guess we'll have to wait until Kinect's launch to see what these new Avatars look like. I hope they do away with the comma eyes, though that change would have nothing to do with Kinect. I just hate them.