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That title doesn't sound at all familiar, but the box art and gameplay seem like what I'm thinking of, so that's probably it. It being on Xbox makes sense in retrospect, because I also remember the game having a reputation for being a showcase for the power of its system, and the PS2 was probably the least powerful console of that generation. Unless you count the Dreamcast, but it folded before that generation really got going.
Edited by shigmiya64

I never actually played this game; all I remember are the ads and reviews I saw for it in magazines. I think you played as some kind of blue guy, and he had a staff. No, it wasn't an Avatar game; it came out near the beginning of the PS 2's life cycle, so it would've come out in 2001, 2002 at the latest (I would guess). As I recall, you explored some kind of magical world. I believe the general consensus in the reviews was along the lines of, "Eh, it's okay I guess."