I discovered Mamoru Oshii’s films through the band Wamdue Project’s videos which featured parts from Ghost in the shell and Patlabor 2. Here in Hungary(Europe) it is very hard to get his movies legally, but I’ve been able get some of them legally on DVD during a journey to England). After seeing those films, I googled Oshii extensively and heard about Avalon and did a search for it on the internet. I found a Polish version with Hungarian subtitles (probably translated from the “Ash is faster” bad subtitles. It also suffers a lot from being translated 2 times and the Hungarian translation is mediocre at best.)
After watching it, I too was full of questions, thoughts and ideas. I went looking on the internet for more info about Avalon and found your site. I spent the last few days reading bits and pieces and your site is a really good resource and a very good read!
Here’s some of my thoughts on Avalon with references to some of Oshii’s other films: The part where Ash enters SA/Class Real she is shown in a sort of virtual space where text/glyphs are spinning around her just like in the intro to Ghost in the shell when Major Kusanagi’s shell is created. I think the process is similar, as the/a ghost in GITS is uploaded into the shell. My theory is, that the ghost/spirit/essence of Ash is transferred from her body (Which is left behind as a vegetable in the “real” world) into Avalon/VR. This way (Just as in GITS2:Innocence, with Motoko Kusanagi) Ash becomes a ghost that is embedded into the system itself and is able to appear in the game without a terminal just like bishop (or the puppet master in GITS).
As for the colour changes and the significances thereof: There is an excellent book by Alvin Toffler called Future Shock, in which he says that because of being faced with a huge amount of data the human mind compresses and eleminates data that is not crucial. For example, do you remember all of the people you saw on the street today? Do you remember what kind of clothes they were wearing? No, because if you did, your head would explode by the end of the day. In my opinion, the immobile/ grey people are how this compression is represented in the film (Dogs move since they are significant to Ash). OR, as Bishop says (And assuming that Ash’s apartment/the city is also some sort of irreality/simulation), the game/city environment is still in development, and the animations and textures that make up the NPCs aren’t quite complete yet (You can sometimes see stuff like this in early tech demos/leaked alphas of games).
So, here’s my two cents on Avalon, I’m still digesting most of the film and I might have some more ideas later, for now these are the main things that I noticed. Keep up the good work on the site!