1. <chat, virtual reality> An image representing a user in a multi-user virtual reality (or VR-like, in the case of Palace) space.
2. (CMU, Tektronix) root, superuser. There are quite a few Unix computers on which the name of the superuser account is "avatar" rather than "root". This quirk was originated by a CMU hacker who disliked the term "superuser", and was propagated through an ex-CMU hacker at Tektronix.