I first met Eyal Gever, the founder of Gizmoz, at the Israeli Web Tour conference in Palo Alto a couple of months ago. Later that day I saw Eyal again, at the Web 2.0 Summit in San Francisco. This time he was giving a demo (in the middle of a hallway) to a group of Fox Interactive folks, including their M&A team. I sat in on the demo, which went on for half an hour or more as the Fox people asked question after question.

Here’s why they were intrigued. Gizmoz has a Flash-based 3D avatar product that is made from a single picture of a person plus their recorded voice. See Eyal’s MySpace page which has an embedded Gizmoz and you’ll understand why this blows away what SitePal and others are doing in this space.

Users start by uploading a picture of themselves or their pet. Gizmoz turns the picture into a 3D model (see image to right), and the avatar can then be customized with a body, clothes, effects (scars, tattoos, etc.) and backgrounds. You then record a message and sound effects, and your avatar is created. The end result has a moving mouth and facial expressions while you talk, and the effect is quite stunning. Eyal calls it “bringing Pixar to the people.”

Here are a couple of videos they made with my picture - see here and here. I’d embed these but they auto-play and people would not be happy. Also, sorry for the lame audio, this was done in the hallway at Web 2.0 while I was surrounded by the Fox team. But I want to show what Gizmoz can do based on a couple of minutes of setup.

The personalized avatar product is still in private beta. The existing product on the site requires the use of a library face, but can be customized and a personal voice can be added. These avatars can be embedded in websites, and Gizmoz also has a downloadable application that adds these avatars to all major instant messaging services.

MySpacers are going to go absolutely nuts over this. Lots of Screenshots below.