We have spent considerable thought on what behaviors will be most important to participants in virtual communities. As mentioned above, an avatar's ability to act enhances communication by adding body language to verbal communication. I don't imagine that I have to convince this group of the importance of body language. In addition, the 2D or 3D graphical representation of the avatar itself communicates something about the person behind the avatar, from the moment the avatar joins the chat. You mention virtual communities.
Avatars reside in virtual reality.
Personally, I believe that VR is any reality agreed upon by a group of one or more people. MUDS are multi-user dimensions, the keystone of Internet multiuser games. Avatars are the representations of participants in a VR world. In addition to the primary role that avatars play as an aid to expressiveness, they should also be key in helping to achieve suspension of disbelief. As any storyteller knows, suspension of disbelief is essential to the success of the story.