The Avatar is the main (player) character in the Ultima series of games. He (or she) is not an embodiment of a god (as in the traditional meaning of the term "Avatar"), but of a set of ethic guidelines called the Virtues. In the game, you must balance your actions and behave according to the Virtues, for it is all that will set you apart from your enemies.
While the games avoid overt references to religion, the system of Virtues is loosely based upon various aspects of Christianity and Buddhism.
The Avatar was first known as the Stranger (or, more fully, Stranger from another world) in Ultima, when he (or she) defeated Mondain. He returned to bring an end to the revenge of the enchantress Minax, and to dispatch their hellspawn, Exodus. It is widely debated whether or not the Stranger and the Avatar are the same person, as the games themselves are not quite consistent on this issue. Ultima IV says the heroes of the first three games were several different persons, and implies that the party of heroes from Ultima III still lived in Britannia. But later games(Ultima VII Part Two: Serpent Isle as the most definite example) imply that the Stranger and the Avatar are one and the same person.
As far as the gameworld itself is concerned, this could be explained with gradual muddling of history (as Batlin explains in |Ultima VII: The Black Gate). The games cover a very long time span, and due to different rate of time in Earth and Britannia, there are long intervals between the games.
While the Stranger/Avatar followed the Virtues in later games, in the first three the player is not bound by any moral guidelines, leaving the future Avatar free to steal and murder, with only the authorities to stop him/her.
The fourth time the Stranger returned, his quest took a different tack. Instead of defeating an enemy, his goal was to follow the path of the Virtues, and retrieve the Codex of Ultimate Wisdom from the Great Stygian Abyss. In the fifth episode, the Avatar defeated a repressive regime over Britannia, and in the sixth he brought peace between men and gargoyles.
In the seventh, eighth, and ninth episodes, the Avatar battled the Guardian, finally destroying both himself and his foe to rid the world of him.
In Ultima I to III, the Stranger was a silent protagonist whose speech was never shown. In Ultima IV and onward, the player must choose keywords (in early parts by typing them out, in VII by picking them). Thus the other characters discuss things with the Avatar, but apart of the topic, the player never sees what the Avatar actually says. By tradition, the dialogue choices the player knows beforehand are "name", "job" and "bye" (and also rarely "health"). This is also parodied in Ultima VII where an actor playing the Avatar has hundreds of lines to memorise, most of them "name", "job" and "bye".
The first time the Avatar had actual dialogue lines was in Ultima VII, but even there full dialogue lines were very rare and only appeared in a couple of places in the games.
Ultima Underworld broke this tradition by being the first Ultima where the Avatar had full dialogue lines throughout the game, and Ultima IX not only had full dialogue lines, but speech to go with them.
Appearance and customization
Since the games focus on the spiritual growth and hope to teach some good ideas to the players as well, the implied idea behind the Avatar character is to make the in-game character a mirror image of the players themselves (the character in the game, in a way, becoming an "avatar" of the player), but this is not explicitly mentioned.
In all Ultima games (except for Ultima IX), the player is allowed to name the Avatar character how they want. Ultima IX does not allow the character to be named, but the option is again open in the fan-made dialogue patch, though none of the full audio dialogue is present.
In Ultima IV and V, due to graphical limitations, the player could only choose the gender of the Avatar character, but in most later games (including Ultima VI, Ultima VII Part Two: Serpent Isle and the Ultima Underworld series) several different character portraits with different skin and hair colors are available. However, in Ultima VII: The Black Gate the choice is reduced to gender only - both the female and male portraits have blond hair and fair skin. (If played with Exult with Serpent Isle installed, the Serpent Isle portraits are also available in the Black Gate.) The Avatar sprite is determined by class in early games, and always the same in Ultima V and VI. Ultima VII has two different sprites, one for each gender. In Ultima VIII and IX, there is no choice in gender, portrait or sprite/3D model - the character is male with blond hair.
The Avatar's trademark clothing often includes a chain mail, with a white, red or orange tunic (with a golden Ankh symbol on the chest and back) over it, and a red cape. Typically, he's also shown wielding a sword. His appearance varies from game to game and version to version, but usually follows this schema - and it is, of course, possible to use whatever clothing, armor and weapons necessary in the games themselves.