Where do I start...
I suppose with the good points.
1) It was a VFX orgasm.
2) Had some truly moving scenes.
3) Great action.
Where it went wrong:
1) The entire prologue felt like a cliche-storm. Space marine protagonist, standard hat for James Cameron, except this one's crippled. I'd go further, but I won't because the cliche storm is structurally the least of the screenplay's concerns.
2) Cardboard villains: The two villains are a cutthroat corporate type (Corporate from here on) and a bloodthirsty military type (I'll call him Ironsides). Beyond this characterization lies nothing. The first scene we see Corporate, he's playing golf in the command center; that's the most favorably he's portrayed. Ironsides on the other hand clearly is here for the thrill of the hostile environment, an environment which apparently is so hostile that breathing the air will cause death in four minutes (more on that later). It makes him feel badass. Apparently badass enough to be totally okay with war crimes and genocide.
3) Most viewers are human: Perhaps the villains' characterization was so crappy on purpose. It takes a lot of work to get a wholly human audience to sympathize with blue people over their own race, so maybe by giving them completely unsympathetic humans, they can more fully empathize with the heroes, who are quite noticeably not human.
4) Hollywood Science and Economics: Oh god, where do I begin.
a) The reason why humans are on this hellhole planet at all (informed hellhole, we see very little evidence that this place is anymore dangerous than a rain forest on earth, other than Ironsides telling us so early on) is because of a cleverly named mineral: Unobtainium. The only thing we know about Unobtainium is that it is ludicrously expensive, and presumably by its name, unobtainable, or damn close. In a two and a half hour movie, I expect things like "Why this mighty McGuffin is so damn important" to be more fully explained than to put a dollar figure on it per ounce. What the hell does it do that makes it worth something? Scarcity does not equal value, utility does (with notable exceptions like luxury goods, which this chunk of rock that they show clearly is not).
b) Floating Mountain Range: WTF? You can't get away with this without explaining it just a little. The characters' eyes barely pop when they see an entire floating mountain range and no explanation how this blatantly unreal scenery exists in a world ostensibly ruled by the same laws of physics that Newton and Einstein studied. I might be a bit of a nerd, but just to be a real prick, I came up with this explanation, totally out of my ass in less than five minutes.
Explanation: The moon, Pandora, is tidal locked to its gas giant planet and the orbital tidal forces are pulling the mountain range free from the underlying planet.
How long would it have taken to say that in the middle of the movie?
c) We see very little of Earth, but apparently we've developed long-distance space travel allowing us to go between worlds. We can apparently shuttle between planets, such as when Jarhead (as I'll call the main character) supposedly will to get his legs back. So while we're busy obtaining Unobtainium, apparently we have gratuitous warpdrive. Which still makes me wonder: Why is Unobtainium so useful and rare that we need to rape and pillage this planet?
5) Speaking of Earth: Our government, on earth, it can be inferred, is nearly nonexistent and the masses know nearly nothing about what is happening on Pandora, other than that they like the bottom line from the operation. This assumes that this whole operation is airtight, despite the preponderance of logistics and aid that such a venture like space exploration would require. Given the enormous amount of money that would be poured into it, and the sheer amount of people involved, the situation on Pandora of indigenous peoples being screwed with like this would inevitably be leaked to the general public back on Earth, which begs THIS question:
a) Why aren't people on Earth rioting in the streets? Seriously. Think about how pissed off pretty much anyone who had ancestors living during Imperial Colonial times would feel when told that this supercorporation is inciting genocide and committing war crimes. They'd be called to task pretty quick unless this supercorporation also governs Earth. However you hash it, the situation back home on Planet Earth must be fully detailed and explored, or your means of propulsion, whether that be FTL Travel or Cryo or whatever needs to be explicitly shown to create a remoteness and unaccountability by the governments on Earth.
All that said, see Avatar for the VFX, but don't buy into the overhype.