The kid looks very much like Aang, and does have some very good martial arts skills. He makes the bending quite believable.
And the movie isn't THAT bad. It has some very good moments, where you can see where it could have been actually great with the right director. In some ways that makes it all the more painful, because you know what it could have been.
Not all the acting is terrible - Irho (sp?) is great, even though he's nothing like the cartoon version. And Zuko is decent as well, all though being angry tends to be an easier acting gig.
But Aang, Katara and Sokka never get to shine, and it's tough to tell how much of that is M. Night and how much of that is them. They do what they're told, especially at that age.
Even with the weaknesses, the final scene is still very powerful - imagine how much more powerful it would have been if the previous 100 minutes had been well done?
If I were to have one major complaint, it would be exactly what we all feared from the trailers - M. Night sucked all the humor, all the heart out of the film.
M. Night needs to change his attitude. He needs to step back, take on something small, and COLLABORATE.