Thirteen years later he did it again: “Avatar.” And as much as “Avatar” stretched the boundaries of the box office, it has stretched the boundaries of cinema as well. The 3-D film featured a staggering 2,500-plus special-effects shots, set a new standard for movie-making technology and may have ushered in a big-screen renaissance in the process.

Liveblog

Walt and Kara are bathed in blue! They look vaguely Avatar-like. And here comes Cameron, who lavishes praise on the red leather hot seats.

8:17 pm: Kara–You’ve embraced tech for a long time. Where did that start?

Cameron: I started as an FX guy. I had to figure out how all of that was done. We no longer use any of the tools I learned how to use. The artistic skills I developed haven’t changed.

8:18 pm: Walt–Do you think there’s a way to enjoy “Avatar” without seeing it in 3-D?

Cameron: Sure. Most of the work I do as a director doesn’t have to do with 3-D. The 3-D should be viewed as value-added. Everyone said you had to see “Avatar” in the theaters, in 3-D. But the DVDs have sold really well. If people have the choice, they use 3-D. If they don’t, 2-D works fine.

8:20 pm: Walt–So will there be a movie that requires 3-D?

Cameron: Sure. That could be an interesting experiment, but it would be a failure of narrative. Good movies scale–they work on iPhones, and on theater screens.

8:21 pm: Kara–We saw a not-good movie the other night ["Prince of Persia"--terrible], and every preview was for a 3-D movie.

Cameron: Yep. There’s going to be a period of time when we risk “debasing the coinage.” If we make people pay extra for a lousy movie, we’re going to be in trouble.

Walt: Who does it well?

Cameron: Jeffrey Katzenberg at DreamWorks. “How to Train Your Dragon” was sumptuous.

8:23 pm: Kara–Let’s talk about the tech involved in “Avatar.” What’s different about your 3-D and other 3-Ds?

Cameron: 3-D has had a rocky start-and-stop experience. He walks through the chronology of different tech. Fast-forward to 2000. First prototypes of projectors with very high frame rates. And I was working on the different end, working on a specialized camera. It still took a long time.

It was a very flat curve for a long time. Now it’s practically vertical. But prior to that, exhibitors didn’t want to pay to retrofit theaters for one movie a year. Studios wouldn’t do 3-D if there were no theaters, etc. I was proselytizing, but most people ignored me.

By 2005, I decided to make a big film in 3-D, “without the wink and snigger,” a serious film. “You know, I’m just going to go out there and do this, and let the chips fall where they may.”

I don’t want to take all the credit. There were a small number of people who were doing this: Robert Zemeckis, Katzenberg. Peter Jackson said he would do a 3-D movie, but didn’t. But the announcement was valuable in itself.

8:28 pm: Can you remake “Titanic” in 3-D?

Cameron: Yes.

Walt: Are you thinking about doing that?

Cameron: We’re not thinking about doing that, we’re doing it. We’ll have it ready for the ship’s 100th anniversary in 2012.

8:30 pm: Kara–Would you do this with “Terminator” and other older movies you’ve done?

Cameron: Depends. We’re going to spend months and millions converting “Titanic.” But if filmmakers do lousy jobs of conversions, “pop-up book style,” that’s going to get old quickly.

8:33 pm: Walt–So what about 3-D TV sets?

Cameron: Problem is that there’s not enough content right now. If you get every 3-D movie, you’ll have a good three days, and then you’re done.

8:33 pm: Walt–And most people have just bought sets recently.

Cameron: Right. But it will change over time. And if you’re buying today, go ahead and future-proof yourself by buying 3-D.

8:34 pm: Kara–Let’s talk about BP briefly. Tell us about your connection.

Cameron: There’s a story that the government went to Hollywood for help. But that’s not the case. I’ve just been interested and really involved in subs and wrecks for a long time. So over the last few weeks, I’ve been watching what’s happening and saying, “Those morons don’t know what they’re doing.” And then I realized I know a lot of people who work in deep submergence. They don’t do oil, but they know the engineering. So I got 23 people together for a brainstorming session at EPA headquarters. The EPA guys weren’t there; they were in the Gulf. But they hosted it.

Kara: You went to BP first?

Cameron: They could not have been more gracious. “But they said, ‘We’ve got this.’” Here’s the thing: We sat in a room for 10 hours and worked this problem. It’s a very complex problem, and it starts 18,000 feet down. Steel fails like it’s made out of butter. So you find out there are things that prevent them from doing obvious fixes.

But there are things that can be done. I want to say, I never thought I would be defending BP. Anyway, I started to shift perspective, to thinking that the government should be monitoring this stuff independently, and I can help with that.

Walt: Doesn’t the Navy have submarines?

Cameron: Yes. We work with them. Anyway, we’re working on a report, etc.

Walt: Is the White House involved in this?

Cameron: No, it’s a private effort.

8:40 pm: Kara–Let’s talk about Hollywood economics.

Cameron: “I think there was a time when Hollywood really didn’t get the rapidity of change. But we’re past that now.” Still, there’s a limit to how quickly they can change and still keep their business.

8:41 pm: Walt–There’s a lot of consumers and tech folks who think you should be able to see a movie or TV show whenever, wherever.

Cameron: You hear a lot of that. But it’s usually not from the people who have spent hundreds of millions of dollars making the film. [Scattered applause. Pretty sure I hear Rupert Murdoch, who's in the front, guffawing.]

8:43 pm: Walt–But why can’t I have it when and where I want?

Cameron: Now we’re at the first time when there is a real question: Do I want it now or do I want it great? People had a choice of watching a pirated version on a small screen, and enough people chose the theatrical experience to make it the highest-grossing movie ever.

Walt: But some people want to watch it on a small screen without stealing.

Cameron: Perhaps there are two percent of people under 30 who have a qualm about stealing. They went to the theater because it was a better experience.

8:45 pm: Kara attempts to talk about music, but stumbles on a Beatles album example. The big idea is that albums have gone away, replaced by singles, but movies don’t have that problem.

Cameron: Nope. But people do watch movies in different ways. Some are super-respectful and ritualistic; others multitask and watch picture-in-picture. At least here, the pendulum has swung back from doing that.

8:47 pm: Walt mentions people who haven’t seen “Avatar” in the theater [ahem]. They feel “trapped,” he says, because they want to see it in 3-D.

Cameron: I know. So we’re helping them out and re-releasing the movie in theaters in August. [Thanks!]

8:48 pm: Walt is still pressing on windows and the limits they put on consumer choice.

Cameron: I don’t really care because I won’t have another movie for three years, and by then, all of this will be worked out.

Kara: What’s the movie?

Cameron: Maybe four years. Either “Avatar 2″ or some other big movie that uses the same technology. 3-D.

8:51 pm: A tech discussion about frame rates, followed by Walt asking Cameron if he would deign to watch a movie on a laptop.

Cameron: Depends on the film. I won’t watch “2001″ on a laptop. But a funny movie would be fine. “The Hangover” would be just as funny on a laptop.

8:54 pm: A discussion about what technology can’t solve. You can make movies for less money, but the apparatus of promoting movies still requires a lot of money. And note that people who have success without a studio’s marketing arm with an indie movie–the next movie they make is a studio movie. I believe in letting people do what they’re good at. Studio marketing people do this every day. A day-and-date release, worldwide–that’s something to behold. A ton of work. We had something like 76, 78 discrete versions of “Avatar” that had to be prepped within five weeks for that.

8:58 pm: Walt–Is Silicon Valley involved in any part of what you do?

Cameron: Yes, but not in the way you might think. I went to Microsoft (MSFT), for instance, and asked for help with archiving and data. We started a year before the movie started on digital asset management. Microsoft has been a great partner.

9:00 pm: So you’re a big-deal director so you can work with Microsoft. Can other directors get help like that?

Cameron: For a movie like this, you need help from someone.

9:01 pm: Kara–Tell us about piracy. How big a problem is that for you?

Cameron: 3-D counteracted that for us. You could pirate the movie, but not the 3-D. That won’t hold forever, though.

9:04 pm: So where does Hollywood go?

Cameron: It doesn’t change much. You still need good stories, good casts, etc. Regardless of windows, augmented reality, etc. It’s still the same business. People have been talking about interactive movies since the 1980s. But we have those. They’re called games.

Walt: What do you think about games?

Cameron: Love them. Want to figure out ways to merge games and movies in next couple projects, where you can experience them in different ways.

Q&A

Can you talk about the Brazil controversy?

Cameron: I’ve been concerned about the environment for a long time and “Avatar” is about that, of course. So after the movie came out, it was so well received by the environmental community that all this stuff came flooding to me. I ended up going into “cause shock.” Ended up working with people in Brazil who are going through a situation that’s eerily similar to the “Avatar” plot.

Kara: What did you do for them?

Cameron: I created a rapport with them and then created a series of media events that bubbled it up to public consciousness in Brazil and for now, at least, put a halt to the dam they were building there.

Dumb question: I don’t get how you filmed it but it’s all CG [computer graphics]

Cameron: It’s not all CG. It’s about 60 percent CG. The film was shot in a virtual world, with a virtual camera. But another part is shot in live action.

Sorry, missed a couple questions.

Q: What do you consider your most personal film and what was the best advice you received when you started out?

A: “Avatar” is probably my most personal film. It really is an expression of everything that has meant something to me since I was five years old. The best advice I ever received? Roger Corman told me to sit down a lot while I was directing.

Q: Did you intend to elicit feelings of guilt toward the environment in the “Avatar” audience?

A: The intent was not to bitch-slap the audience but to take it outside of itself. Which is something that only film can do. By the end of “Avatar,” you’re looking at the human world from nature’s perspective and it doesn’t look so good.

And that’s a wrap.

A note about our coverage: This liveblog is not an official transcript of the conversation that occurred onstage. Rather, it is a compilation of quotes, paraphrased statements and ad-lib observations written and posted to the Web as quickly as possible. It is not intended as a transcript and should not be interpreted as one.

Hollywood director James Cameron is well known for his heavy use of special effects and techtastic techniques in his movies, which include “Titanic,” “Aliens” and the first–and best–two “Terminator” blockbusters.

In a few weeks, Cameron is hoping to hit geek gold again with a 3-D sci-fi juggernaut called “Avatar.”

Set to come out in mid-December, it is full of all kinds of fancy and innovative CGI animation.

And the use of blue-colored avatars–essentially digitally animated likenesses of the real-life actors–is a big plot point in the movie, which is about a soldier caught in a war between a greedy mining company and a heroic indigenous tribe on a planet called Pandora.

Here’s one of the trailers for “Avatar”:

And, of course, here is a video of a hysterical recent spoof of the movie done by “South Park”–with a little “Dances With Wolves” tossed in, because it is the same exact plot–called “Dances With Smurfs”:

Digital Daily’s John Paczkowski was unimpressed, as were Duncan Riley of TechCrunch and ZDNet’s Mary Jo Foley, for example.

But, to my mind, giving the Microsoft co-founder and chairman a hard time at this point is sort of like razzing Celine Dion, who coincidentally also just completed her own longtime run in Las Vegas in her Caesars Palace show, “A New Day.”

In other words, let’s just all admit that–as irksome as both have sometimes been–they do kind of grow on you after a while.

While that may be still debatable with Dion, I know, it is squarely the case with Gates, who has had the longest-running and most complicated relationship with the tech industry, even as he has dominated it for most of the past two-plus decades.

Gates’s impact will surely be chewed over in the history books in centuries hence–likely as not, always with the Yin to his Yang, Steve Jobs of Apple.

And, despite all the controversy his tenure has engendered (most especially the bullying antitrust behavior), as he transitions from his day-to-day role at Microsoft in July in what will likely be one of the longer goodbyes in the digital arena (including his sixth appearance at our D6 conference in May), I am guessing his influence will be seen as a net plus in the years to come.

While many level charges at Microsoft as a hindrance to innovation over the years, via the overwhelming dominance of its Windows operating system, the fact of the matter is that the digital industry has never been more fast-moving and quick-changing, and it remains one of the brighter spots in the pantheon of businesses worldwide.

While that is not because of Gates and Microsoft alone, it is also not in spite of them either. In fact, it’s quite bracing to see Gates attempt to make quick shifts over the years as technology has raced past him, an indication of just how powerful change is compared to the world’s richest man.

Very powerful, as it has turned out, and watching Gates try to keep up has been a perfect metaphor for all those who labor in the tech sector.

His famous December, 1995 sleeping-giant-has-awakened speech about the Internet was a case in point, as were his aggressive moves in later years into a wide range of arenas such as gaming, search, online services, social networking and even an attempt to take on the iPod hegemony with the Zune.

It is clear that most of Microsoft’s efforts outside of its core software business–and a great business it remains, by the way–have been less impressive. But it points to a key factor that never changes throughout the tech arena that even the giants are always vulnerable.

Now, going forward, what Microsoft will do post-Gates, of course, is all that matters.

Will it try to vaunt ahead in the search and portal arena and catch No. 1 Google by attempting to acquire Yahoo?

Will it use its popular Xbox to finally move successfully into the home-entertainment space, as evidenced by announcements Gates made last night at CES about deals with media giants like NBC Universal and others?

Can its MSN ever be more than just an also-ran portal?

What will happen to software in the years ahead as applications inevitably move to the Web?

Gates will not be the one to figure it all out, as he will be off, focused on his laudable philanthropic work when these questions and more get answered.

But even he could not have made an accurate guess onstage last night, as much as pundits wanted him to.

In fact, one of the more tiresome things to endure at CES–aside from the long lines–is always having to listen to the spate of predictions of what is to come, when, the truth is, no one really knows how it will all turn out.

It was always thus. After all, reaching way back in history: Wasn’t the launch of the Titantic supposed to herald in the age of high-tech super-boats? Of course, no one figured in the tragic results from its encounter with an iceberg.

But it did make for a pretty good song, so let’s enjoy a bit of Celine to send Bill Gates off on what one hopes is a much safer journey: