Perhaps this observation has already been made, but, if so, I haven't seen it...
In The Lord of the Rings, Gandalf and Saruman are members of a group of five men known as Wizards. In actuality, these Wizards are Maia spirits, or demi-gods, sent to Middle Earth in human form. They are subject to pain and death, but wield power far beyond mortal dreams. In other words, they are avatars.
Interestingly enough, the Five Wizards serve a roll somewhat analagous to that of the Avatara in Myth - they are responsible for leading the Free Peoples against Sauron.
I'm not necessarily arguing that Myth's Avatara are incarnations of the Myth world's demi-gods. In fact, I'm inclined to believe that they are nothing more than powerful human sorcerors; but this nevertheless seemed an interesting parallel to LotR.
Garm