Here is a video of All Points Bulletin's character creation system:
It's very sophisticated. I've done some work on avatar systems and there's a metric ton's worth of nasty little issues - mainly related to 3D overlapping. You know, hats on hair and stuff like that. Hoodies were my favorite - a coat that's also a hat! Doing it right, as Real Time Worlds seems to have done, takes an enormous amount of work.
There's a cute industry in-joke at the end of the video by the way.