Yes, it has a multiplayer mode that uses Xbox LIVE to work. Avatar isn't a very popular game; not many people play it, thus WAAAY slower search times. You can do things such as CTF, Team Deathmatch, King of the Hill, and much more. Plus, on multiplayer you can choose if you are RDA or Na'vi. Sadly, you CANNOT play campaign on Avatar on LIVE.
No.
No.
No, your avatar can wear whatever you won within any game.
Yes
you can create an avatar then change it but no you can not crete two accounts with the same email if it will be on xbox live
if this the xbox live avatar you have to buy the prop(s)
Yes you can create your own Avatar character in the game.
No, just recover your gamertag on Xbox Live.
You usually get gamer point and extra things while you are playing the regular game, but sometimes you can complete acheivments during x-box live.
yes
No. yes
Halo 3 itself does not contain Avatar Awards, but you can download the free "game" Halo Waypoint off of the Xbox LIVE Marketplace. This "game" will count up your achievements and depending on which ones you've unlocked, it will give you Halo themed Avatar Awards.