I figured I would hitch my opinion from another thread to this one...
I never really watched Avatar, so I can't really compare what went wrong with character traits or those aspects of the adaptation.
What I did have problems with were two factors, bad abridgment and awkward crossover.
By "bad abridgment" I mean that much of the content had to be either omitted, or was narrated in way that went over weird.
Example One: Prince Zuko's explanation of his past was summed up in a weird way. He had to bring in this little street kid to out of the blue, explain why he was exiled. The whole time, Zuko was filling in the insider details despite the fact that he was in disguise trying to blend in at that village. It was a bad way of forcing a means to communicate to the audience the information about his relationship with his father, the king.
Example Two: The relationship between Sokka and Princess Yue was very unbelievable. The concept was introduced to the audience via narration. We had nothing to go upon other than their word that it was true. The chemistry between the actors was bland, and their supposedly flirtatious dialog was laughable. The odd timing of the sudden character change was messed up too. Earlier in the movie Sokka mentions that he's fiercely protective of his sister Katara, but as soon as Yue comes along he seems to forget entirely. And in the last scene of that dynamic when Yue is about to sacrifice herself for the Moon Spirit, she says to Sokka "I'll miss you, more than you know". Right, sure. I've been shown this, how exactly?
By "awkward crossover" I mean that they tried to make this film appeal to adult audiences while remaining close to its childlike source material. This resulted in some strange friction.
Example One: The action scenes tried to be exciting, but there was no realistic combat damage. In live action warfare, you expect there to be some sort of consequences for hand to hand combat with sharp objects. But I never saw anyone run through, or even slashed with a weapon. Most of them seemed to be either struck with a blunt object or some elemental attack. The elemental attacks being non-lethal in many cases. Pirates of the Caribbean: Dead Man's Chest was also kind of family oriented, but they made sure you knew who had been stabbed. Therefore, you got the impression that nobody was really killed as a result of battle, but merely "knocked out". That's why when Commander Zhao was attacked by four water benders, you expect him to have simply been knocked out. All they did was cover him in water. But, apparently he was the only person mentioned to be killed in combat.
Example Two: Really immature diction. Diction being "a writer's choice of words". It seemed like most of the dialog was painfully simple and never seemed to get above the level of a 10-year-old. The best example of this was Katara's Grandmother. An elderly woman who appeared to be pushing 60 or so had the worst way of conveying the concept that she had a way with prophecy and divination. She said and I quote, "I found out your destiny today". I may be a bit picky with this, but the phrase "found out" is so inappropriate for that moment. You would expect that from a little kid, but not an elderly adult.
Example Three: Dumb kiddies doing dumb kiddie things ruining the immersion of the film. There was this tense standoff between Aang and these Fire Nation guards at an earth bender concentration camp. Aang is trying to reveal that he's the Avatar for the first time in the movie. The guard is skeptical and says that the avatar has to be an air bender, and they are extinct. The audience is expecting Aang to display a show of force, maybe some shock and awe to prove his power. But no. Dumb girl Katara runs up to the guard and shoves him crying "Leave him alone!". To which the guard is about to retaliate, when Aang is forced to jump in and save her with air bending techniques. I had to face palm at this, because things were shaping up for a much more mature way of introducing Aang's abilities, but out of the blue dumb kiddies had to be predictably irrational. That scene totally brought to mind the lesson of dumb kiddies doing dumb things in The Patriot. Remember when Heath Ledger is taken into custody by the British in front of his family? And the dumb kid brother runs up and tries to break him free in a fit of rage, but gets shot by the British officer played by Jason Isaacs. It proved a point to me that dumb kids that assault armed bad guys with no plan other making a scene get killed fast. It's that sort of childish immaturity I wasn't expecting in a film made to appeal to adults.
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That said, I thought they did a decent job with Uncle Iroh. He had to be my favorite actor/character. Though that must be because with that beard and being engulfed by flames he reminded me of Sarumon.