What about Kingdom of Keflings? Didn’t that use the Avatars?
It did, and they walk around and pick things up, as well as kick Keflings. Not sure if those are considered custom animations, but it seems likely.
Scene It! Box Office Smash does this. You don’t control the avatars directly, but they jump around all funny-like.
The most important thing I saw in that video was the UI actually loading in acceptable times. Hopefully that’s not an artifact of running off of a disc or on an OC3.