We've all heard allusions to Cameron's massive sets, motion cap system and 3D/virtual cameras used to create Avatar, but this 22-minute clip actually shows us these techniques. (So don't watch this video if you don't want the magic spoiled):

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Hit up about 16 minutes in to see CGI characters layered into live action scenes in real time—which is essentially augmented reality making its way into filmmaking. [Sci Fi Wire]