I never really got a chance to go into detail before, so let me do that now.
The Avatar system can be accessed from the Avatar Management button in the My Iczer page, and the Avatar section of the shop. There are six categories of Avatar. Main body, Equipment, Background, Moral Support, accessories, and Items.
General -- All avatars can be purchased with either Gran, Fight Money, both, or one or the other. Look below the Avatar to see what payment options are available. Before you buy anything, hit the "Preview" button to see what it looks like on your avatar. This makes sure it looks right. There are lots of strange and unusual avatars around, and not all of them look right with all of the equipment or backgrounds. The Avatar system may also stop you from using equipment not designed for your pose.
Main Body -- This is the basic type. There are three basic poses. Knight: Avatar has both his hands apart, good for holding a sword and a shield. Warrior: Avatar has his hands together, good for holding two handed weapons. Wizard: one hand his across his chest, good for holding staves. In addition, the Beta avatars are looking in the other direction to make them stand out. They may or may not look good with different equipment, so be sure to try out different things. There is also something called Paper Doll Avatars. These are designed to be used with the outfits, gear and armors for sale in the equipment tab that are tagged "PD ADDS".
Equipment -- This covers most objects held in your Avatar's hands, like weapons, and clothes and gear for Paper Doll Avatars. They are designed to be used for different poses, and will be designated as such.
Background -- Different locations from the Chronicles of Lavato. They work with any Avatar, but be sure to hit Preview to make sure you don't clash!
Moral Support -- No comment about the Japanese having sake in this section. These avatar add-ons are pets, and they work with most any Avatar. Because of the way the system is set up right now, you can not have a pet and an accessory at the same time. This is just as well since most accessories, like the teddy bear and the bag, take up the same area as a pet normally would, and would overlap.
Accessory -- This is a kind of extra category for cheap but nifty add ons that help personalize your Avatar a little bit more. Glasses are very popular among the Iczers, and I think Lupos is the only GM without a teddy bear. Accessories work with most Avatars, but not all. Please use the "Preview" to make sure they look good. Right now, you can't have both an accessory and a pet active at the same time.
Items -- These are potions, oils and incenses. They have limited uses and they convey some real benefit to your Iczer. While they don't effect the outcome of duels, they do effect the rate in which your Iczer progresses, and gets treasure battles.
Special section: Partners
Partners are Characters from the game and story who stand by you and talk to you as you play (though text), giving simple advice, cheering you on, and sometimes taunting your enemy. One could say that Partners are similar to the Paper Clip from Word, but my answer to that is that is that the Paper Clip isn't sexy, isn't a maid, and doesn't call you "Master." Enough said.
"Scissors are overpowered. Rock is fine." -Paper