Well what kind of avatar are we talking about?
Do you mean like forum avatars? Because I don't pay any attention to those. If your screen name is Phil and you have an avatar of a 16 year old anime chick I can figure out that you probably aren't a girl.

Now as for game avatars (wow, second life, ect) yeah it's a bit creepy, mostly because those games have "teh sexz" and that's just false advertising. Then agian, I find that genre of game to be a little creepy in of itself, so maybe I'm not the best judge.
Just for the record though, all the avatars I've used on this forum (Shangs and Johnny) were picked because the characters reminded me of myself either physically or personality wise.
I guess there are two people in this world, people who want to be somebody else online, and people who are just fine being themselves. There is a reason that Howard Casto's screen name is Howard Casto.

I don't think that screen names are a bad thing or anything like that, I just never saw the point. I'm me and the forums I frequent aren't anything embarrassing, so I'll just use my name. The same goes for avatars.... I like the funny ones, but they get real old real fast and if you change your avatar too often people get confused. So I just pick one that kind of reminds me of myself and stick with it... until it gets so old that I can't stand it anymore.