Let's face it, if James Cameron had made a movie with the Iraqi resistance as the heroes and the U.S. military as the enemies, and had set it in Iraq or anywhere else on planet earth, the packed theaters viewing "Avatar" would have been replaced by a screening in a living room for eight people and a dog.
The Na'vi people of "Avatar" are very explicitly Iraqis facing "shock and awe," as well as Native Americans with bows and arrows on horseback. The "bad guys" in the battle scenes are U.S. mercenaries, essentially the U.S. military, and the movie allows us to see them, very much as they are right now in 177 real nations around the world, through the eyes of their victims.
Rob Kall at OpEd News suggested that we make flyers to hand out at theaters following screenings of "Avatar." Having now seen the film, I think he's right. Here's a flyer (PDF).