The $US200 million Avatar is about a band of humans struggling against a distant planet's indigenous inhabitants and will feature 12 computer-generated characters.

Using a new digital 3D format, Avatar and the technology behind it could revolutionise the industry, making 2D films seem as outdated as silent films. Cameron is pushing the technology to its limits while simultaneously plugging the benefits of 3D with evangelical fervour. Film heavyweights such as Steven Spielberg and Peter Jackson have already become enthusiastic converts, teaming up to create a 3D trilogy based on the Belgian book series The Adventures of Tin Tin.

A new FUSION digital 3D camera system developed by Cameron and Vince Pace is being used for Avatar's live action shots, allowing Cameron to see the virtual characters as he is filming. Cameron will be able to direct his virtual creations as if they are real people on a live action set, rather than making adjustments in postproduction.

"These are supposed to be real people, real characters," said Cameron. "If we can pull it off, Avatar will be the coolest film ever made. If not, we'll have egg on our face."

Weta Digital, the company responsible for Peter Jackson's Lord of the Rings trilogy, is supervising the special effects. Weta has helped create a motion capture head rig that maps facial expressions. In the past, actors had to apply hundreds of tiny dots to their faces for the camera to track, a time consuming and sometimes frustrating process.

Some filming has already been completed in Hawaii and Los Angeles, while an additional 31 days of live photography will be carried out on Weta's soundstages.

"It's controllable. No weather conditions. No water on this one," said Cameron in the Hollywood Reporter. His problems with water and budget blowouts on the set of Titanic are legendary.

An article in Wired Magazine suggests that after more than 50 years after its first run "3D is staging a comeback" and is now "the biggest gun yet in Hollywood's growing arsenal of F/X". Most of the major studios have two or three 3D movies already in production.

A 3D version of Beowulf starring Angelina Jolie will test the waters in November, showing on a record 1,000 3D screens across the US.

"It will become another consumer choice, like premium or regular gas," Cameron said when asked about the potential of 3D cinema by Business Week. "The premium experience of 3D will be the preferred viewing experience for action, animated, fantasy, and science fiction films."

After 11 Academy Awards and the all time box office record for Titanic, Cameron has a lot of clout in Hollywood and has always been at the cutting edge, as he convincingly demonstrated with Aliens and especially Terminator 2. Even so, 3D faces serious obstacles before it can become the viewing experience of choice for the general public. The lack of 3D theatres worldwide and a public unused to sticking a pair of goggles over their eyes are two of the biggest. The rapid uptake of larger and higher definition plasma and LCD screens also makes it harder to persuade people to leave their living rooms.

I remember being underwhelmed by my first experience with 3D in an IMAX cinema. I especially remember a friend struggling to fit a pair of glasses under 3D goggles. Then there was the nausea, dizziness, and headaches people experienced in the early days, all of which didn't generate positive feedback.

Optimistically, one of the original production announcements from 20th Century Fox stated that "with the continued roll-out of digital projection systems, the studios and filmmakers anticipate that digital 3D theatres will be widespread by the film's summer 2009 release".

I can't see it happening that quickly myself. However, there's no better Director to push the 3D envelope. If Cameron's Avatar can spark the imagination of the film going public, perhaps like 2001 and Star Wars before it, Avatar can set a standard that Directors want to imitate and the film going public crave. All it really takes is that one iconic film. Maybe 3D's day is here at last?

Update!
Read our review of Avatar here.

YouTube video of Cameron discussing Avatar

Avatar in Wikipedia