Human communication is fundamentally social. From the time we are born, we begin reacting to the social cues in our environment and learning the appropriate rules for effective interaction, which include verbal behaviors such as intonation or word ordering, and also non-verbal behaviors such as posture, gestures, and facial expressions. These behaviors convey attitudes, identities, and emotions that color our communication. We often create substitute conventions for communication channels that don't naturally provide bandwidth for non-verbal cues, such as e-mail or online chat sessions.
Unfortunately, the majority of software interface design has focused primarily on the cognitive aspects of communication, overlooking most social aspects. However, recent research has demonstrated that human beings naturally react to social stimuli presented in an interactive context. Further, the reactions often follow the same conventions that people use with each other. Even the smallest cues, such as colors presented or word choice in messages, can trigger this automatic response. The presentation of an animated character with eyes and a mouth heightens the social expectations of and strength of responses to the character. Never assume that users expect a character's behavior to be less socially appropriate because they know it is artificial. Knowing this, it is important to consider the social aspects of interaction when designing character interaction. The Media Equation: How People Treat Computers, Televisions, and New Media as Real People and Places by Byron Reeves and Clifford Nass (New York: Cambridge University Press) is an excellent reference on current research in this area.