Microsoft has issued a set of guidelines for Xbox Live Indie Games creators who wish to use avatars.
The guidelines say that avatars must not be allowed to have their own voice, must not "excrete obscene bodily fluids or substances" and "is not allowed to hold, be seen around or partake in any controlled substances or paraphernalia including, but not limited to, alcohol, tobacco and drugs".
In addition to that, Microsoft says avatars also must not "try to get the player's attention in an annoying manner" or "use profane, racist, or discriminatory language, nor can they make obscene gestures."
The full guidelines can be found here. So those waiting for their avatar to get boozed up before going on a drunken rampage while swearing and urinating over their opponents, you might be waiting a while...