Lindies have dusted off avatar puppeteering, which ties in with Mitch's recent acquisitions of technology for direct digitization of body movement via webcam code. That means waggle your arms in front of the pc and your av waggles its arms. It doesn't work great but is part of the way of the future.... it's getting the attention of devs at LL. For some info on avatar puppeteering look at http://www.avatarpuppeteering.com/ I believe we'll see the abilility to create animations in world reasonably soon (in LL terms) due to the work on this, as well as more solid and intuitive animation tools. LL has also acquired ragdoll physics modules which (like havok) can be distributed for free in a free client... so we know they're working along those lines.