guilie suit from CoD 4 and BF:BC (same I guess)
lancer (obviously)
how about a shirt with red-ring on if you send it to microsoft for repair...
cardboard mjolnir armour
head-crab (or is it called face-hugger? from half-life anyways)
shoes with separate toes (mirror's edge)
awsome face-mask (army of two)
proton-pack (ghostbusters the game)
flaming avatar (far cry 2)
various military gear and weponry from games like ghost recon, rainbow six vegas, CoD4 and BF:BC

ryu's bandana

no

the whole get up.    DO IT!

This would be pretty sweet.

Hopefully this will be coming soon so Avatars can get some of the Street Fighter 4 stuff like Home, at latest it needs to be out for Christmas just think Halo ODST armour or Mass Effect 2 armour that would be awesome hopefully they can make this backwards compatible too, Gears, Fallout etc. then again saying all that everyone will probably end up wearing one costume.
Hopefully they have other plans for Avatars in games and maybe an actual party room for the XBL parties or something like Homes theater for E3 and other events, wouldn't really like a full home copy though alot of that seems pointless and slow to use, just like a party space maybe with decorations and some events places on special ocassions that could be kool.

I think the best suggestion I've seen so far is unlocking Kazooie for your avatar.

EDIT: Scratch that; the best suggestion I've seen is a Headcrab plushie.

That's just how it should work

Claw Gauntlet - Prince of Persia 2
Guile hair - Street Fighter IV
Bacon Butty accessory - Viva Pinata 2
Moogle puff ball antenna - FFXIII
"Owned by Dennis Dyack" shirt - Too Human 2

Dizzy's Hat from Gears 2 please

Steam needs to have a gamerscore.

A Horsestachio mount

Oh yeah and fursuits so I know who not to play with

Marijuana pipe  (Wolfphelpstein 3D 2084 AD)

LOL at the title.  I never would have pegged Jeff as a Madonna fan... :^D

Anyway, WTF!  Where the hell are the F'in' capes.  I have this sweet-ass vampire avatar and no cape.  I'm tellin' you that dog won't hunt!  Give me my damn cape now M$!  Chop Chop!

Rock Band 2 - Nigel Tufnel's X-Ray vision shirt (yellow trousers optional); that, or Derek's, um, package
The Godfather - Sonny's wife-beater
The Godfather II - Fredo's fishing gear
Assassin's Creed - Templar outfit
Not to mention the Claude Speed get up from GTA III for future GTA IV achievements (for those who killed Dwayne and didn't get PBX's pad)

i dont own a 360 anymore, but im glad that MS is finally doing something to differentiate avatars from Miis and stuff

Assassins creed, Altairs white cloak.