Just for the record, the Avatar Blu-Ray DVD plays correctly on my LG BD370 player, with the latest firmware (V7.170.00.26, upgraded from the device). I get a message saying "your player may need an upgrade", then the screen goes black, but after about 45 seconds, the DVD menu appears and you can play the movie correctly.
The first time I watched it, the black screen freaked me out, I didn't wait too long, and ended up watching the movie from the regular DVD. I haven't yet watched the whole movie in Blu-Ray, but from the few scenes I watched, the difference is noticeable and the quality is amazing.