In the "Winter Solstice Part 1": The Spirit World" When Zuko finds his uncle Iroh he sees him bathing in a hot spring. Zuko urges him to get out of the water so they don't lose Aang's track. When Iroh submits to it he gets out stretching much to Zuko's horror and disgust. He realizes Iroh isn't wearing anything! The only censor is Zuko's hand. Many people still wonder how they snuck a naked fat guy into the scene.
Zuko: "Uncle? We need to move on. We're closing in on the Avatar's trail and I don't want to lose him." Iroh: "You're tired, Prince Zuko. Why don't you join me in these hot springs and soak away your troubles?" Zuko: "My troubles cannot be soaked away. It's time to go!" Iroh: "You should take your teacher's advice and relax a little. The temperature's just right. I heated it myself. [He breathes steam through his nose.] Zuko: "Enough! We need to leave now. Get out of the water! Iroh: "Very well! [He gets up, exposing himself.] Zuko: "[Shielding himself.] On second thought, why don't you take another few minutes. But be back at the ship in a half-hour or I'm leaving without you!"
In "The Fortuneteller", Aang comes in beaming after eavesdropping on Katara's fortune
Sokka: Looks like someone had a pretty good bathroom break. Aang: Y-yeah... when I was in there... Sokka:I don't even want to know.
In "The Deserter" Aang moons Zhao. He keeps his pants up, but still. His posterior is pointed right at the camera.
In "Bato of the Water Tribe" Iroh seems to have a thing for June, a bounty hunter hired by Zuko, who is obviously much younger than Iroh. She later alludes to this in Book 3, in "Sozin's Comet Part 2: The Old Masters":
June: Where's your creepy grandpa?
In "The Cave of Two Lovers" the gang meets a group of nomads. Their behavior is basically that of a stereotypical hippie, bags under the eyes and all. And their leader is named Chong.
In "Bitter Work," Aang has to learn how to stand up to things like an Earthbender. Toph ends up going through his things and stealing his bag of nuts and his staff, which she uses to crack the nuts. Only in the end he has the balls to demand them back.
"The Drill". Not only is the long stick like drill very phallic in appearance, but when the slurry overflows it looks like a "climax" into the wall. It doesn't help that the general in charge of the defenses was going on earlier about Ba Sing Se being an "impenetrable" city.
In "Tales of Ba Sing Se" Sokka is having a Haiku off with a leader of a poetry club which happens to be all girls. We get this exchange:
Sokka: Like I paddle my canoe, I'll paddle yours too!
This last line is punctuated by Sokka slapping his bottom.
In "The Earth King" there is a scene where Zuko dreams about a serpentine dragon encircling him closely and whispering in his ear with Azula's voice, in a tone that can only be described as extremely seductive. Its exact words are "It's getting late, are you planning to retire soon, my lord? ...Relax, Fire Lord Zuko. Just let go. Give in to it." The Incest "Subtext" in that scene gets pretty close to just being "text", and would be pretty blatantly sexual even if the voice belonged to someone else.
The dance in "The Headband" could be regarded as G-Rated Sex. Starts out slow and measured... and winds up with Katara and Aang panting and sweating profusely.
Katara: Aang, everyone's watching us... Aang: Don't worry about them. It's just you and me right now...
Meh. You could make a similar analogy about some real life dancing. It was a rather suggestive dance though.
Indeed, the same thing happend in the first High School Musical.
Fans who toured the studios returned claiming that the original designs of the swimsuits the girls wore in the episode "The Beach" were rather... naughty. It was a Take Our Word for It, but they were implied to be something that most anime wouldn't have done in a Beach Episode. Considering that the final designs that made it to air were actually fairly risque for what was nominally a children's cartoon (including highlighting Ty Lee's, ahem, character growth), these rumored original designs were probably sacrificial lambs to let them get away with the bikinis for Azula and Ty Lee.
"Nightmares and Daydreams":
Zuko's and Mai's behaviour. Keep in mind Mai has an entire house to herself (the website states her family is still in Omashu), and Zuko got rid of the chaperones earlier in the episode. At one point, the camera cuts away while they're together at Mai's house late at night and we see Zuko wearing his hair in a top knot. When the show returns to their side of the story the next morning, Zuko is still there, lounging on her couch, that is in her bedroom, wearing the same clothes, with a badly messed up head of hair.
Aang: "No, Firelord Ozai, you don't have your pants!"
Ozai: "My royal parts are showing!"
Arguable made even more risqué in the Swedish dub, which calls them his "royal jewels" instead.
"The Day of Black Sun":
One to do with death rather than sex—although they couldn't directly show casualties, over the course of the battle in "Part 1: The Invasion", the number of Water Tribe warriors and Earth Kingdom soldiers we see noticeably dwindles.
Azula's downright lecherous line in "Part 2: The Eclipse" about Suki being her "favorite prisoner".
While relaxing on Ember Island in the "Sozin's Comet Part 1", Katara announces that she has a surprise. Toph quickly replies "I knew you had a secret thing with Haru!"
There's quite a few instances of dubious beverages showing up in the show that probably wouldn't have flown in a lot of other shows. There's at least two bars in the series, one of which shows up twice and features June drinking something that probably isn't tea. Zuko's ship crew also drinks something out of tankard-looking cups. Toph's mother and Earthbending master are briefly seen drinking what appears to be a type of Asian hard liquor called bai jiu. And then there's the "cactus juice," which is even worse since it's the Avaverse's version of peyote (an illegal hallucinogen) and not just alcohol.
Aang using "monkey feathers" as an apparent swear, the pronunciation of which is an almost perfect anagram of "motherfucker".
The fact that Zuko and Azula's subtext was about two inches away from being text the entire series. Really, it's surprising that they had subtext at all, considering this was a kids' show.
To take that a step further, the fact that Azula generally looks and sounds like she's coming on to whoever she happens to be talking to at the moment raises some questionable implications.