Avatars are obviously very important in Second Life. They are how you appear -- literally. So let me go over a few things about them for those of you who might not be familiar with 3-D programs and terminology.

This is the main avatar for my main account: Venus Frequency. I'm going to make her a t-shirt that reads, "If you think I look like this in real life, you're on crack." This body is a shape, skin, hair combo that I bought. It is not a basic free avatar.

This is Venus with different hair.

This is Venus with different clothes: a too-shiny dress... And different hair.

This is Venus with a different body.

This is Venus with a male body: one of the starter avatar bodies.

They are all still the same name and same account. They all have "Venus Frequency" floating over their heads wherever they go.

In Second Life, you can look like anything you -- or someone talented -- can create inside the design system. You can be male, female, tall, short, a cat, a dragon, a pot of petunias... Short of a complete avatar change, you have the ability to alter your basic avatar's appearance in SL through the "appearance" feature the in-sytem tutorial will cover. But unless you have an eye for it, the Poser-based slider controls can quickly lead you to something that looks like a telepod accident. Most people leave the designing up to people who are really good at it and buy their avatars. An avatar can be as cheap as $100 Linden (about 40 cents US) for an un-modifiable shape and cartoony skin; or as expensive $30 US or more for delicately shaded skins on an anatomically honest yet stylish shape.

If shopping for an avatar, it helps to understand the following. Avatars are composed of four major elements, and different avatar providers will provide different pieces, or different combinations, or entire packages. Know what you're buying before you spend the Lindens. I strongly advise against buying anything expensive until you've bought and worked with a cheap thing of the same type: whether that's avatars, clothing, houses, etc... 

Shape

An avatar's shape is just that, the underlying body shape from height to the length of the nose. This covers ass width, calf shape, breast size (not penis size - those are almost always purchased separately), eye width, etc... Think of shape as being the muscular-skeletal system underneath the skin.

There are a lot of vendors in SL who sell only shapes. They will have beautiful galleries showcasing and offering their shapes covered by someone else's skins and wearing someone else's hair. They will often give you a style card for the shape in question, showing where the hair, skin, or eyes were purchased so that you can go and buy the same stuff and create the same look. This can be great if you only want a shape; but it can also be a very expensive way to go since some of these vendors sell their shapes for the same price another vendor sells their shape/skin packages. Be aware. Shop around.

Skin

The skin is the skin that goes over the shape. Good skins are painted in Photoshop. They are carefully shaded to match a given shape: using a natural skin tone and painted shadows to show off physical features that normally would be quite bland in the low resolution 3-D environment. Th skin will also include body hair, including facial hair like stubble and goatees -- as long as it isn't a long beard. Skins also include makeup and scars; but rarely tattoos -- that's a different thing (hair). 

Many avatar vendors will sell multiple skins to go with a single shape -- or sometimes they don't sell shapes at all. They will often package skins in sets. A set might include the goth pale version, the suntanned version, and the ethnic version. Or they will all be suntanned, but they will have various amounts of facial or chest hair.

Hair

Good hair is a thing unto itself. Flexi hair -- hair that moves in the breeze or as your avatar moves -- is what many people go for.  You will usually  -- though not always -- buy your hair separate from the shape and skin -- even if those two components are sold together. Hair is also often packaged in sets. The most common packaging involves a single style in multiple sizes (to fit different head sizes), and then multiple colors.

Eyes

Eyes come in every shade imaginable. Sometimes they come with a shape or skin, sometimes they don't. Either way, you can buy them separate.  

Animation Overrides

All avatars start with a basic animation set. This covers how they move and react -- also cute things like typing when you're doing typed chat, or a take a picture gesture when you're taking a snapshot.  This animation set can be altered with what's called an AO (Animation Override). You can make you avatar move, sit, and stand cuter, sexier, manlier, etc.

I will not go into depth about the mechanics of that except to say that an avatar body is a map of attachment points for items. This is only truly important for you if you have two items that think they should attach to the same point. For example, a face light -- an invisible light source that brightens and highlights your face kind of like a photographer's spot -- is usually designed to be worn on the nose. This would conflict with a nose ring. Often, items can have their attachment points adjusted to remedy conflicts.  

Clothes - The possibilities are endless. There are entire shopping malls in Second Life devoted to people selling clothes of every variety.

Tattoos are bought separately and applied to a body part.

Piercings and Jewelry are pretty much the same thing. They are applied to a body part in the same way a tattoo is.

Makeup is part of the avatar's skin. You do not purchase and apply it separately.