First off, lets make this clear Avatar is the best looking thing you will in theaters this decade. Absolutely amazing. From broad scenery porn to the tiniest detail, every single bit of this movie is staggeringly good-looking.
As for plot, what you've heard is true. Dances with Wolves IN SPACE. The aliens are the clearest Native American stand-in you've ever seen in Sci-Fi.
I do have some nit-picks. The alien mineral at the root of the movies conflict is called Unobtanium. For real. Dozens of amazing creatures and war machines created down to last detail and they couldn't spend another 10 minuets to come up with a better name that Unobtanium. Its not unobtainable! Obtaining this material is triggering an interstellar war! Get a better name name.
One last point. If, in the future we ever find a race of noble alien savages living atop an incalculably valuable resource, we are going to let them be. You know why? Because we will all have grown up seeing the movie classic Avatar, and we will know better.