The application is called Lively.com. Another good thing about Lively is that you can create your own virtual chatrooms and can add it to Facebook or MySpace or any other website. When you create your virtual room with Lively, you can customize it by putting your own taste to it. You can arrange furniture, change objects, move objects around and much more. YOu can even have animated emotions with your friend's avatar.
One room can have upto 20 people who can chat with each other. While chatting, text appears as cartoon-style bubbles on top of avatars. Currently Lively works only on Windows XP/Vista platform and requires you to download a small application.
It sounds like a fun application.. I think I will try it tonight.
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