I'm not sure why some people are acting like this is some out-of-the-blue hastily tacked on addition to a standalone film because of Hollywood's greedy demand for sequels. Cameron said he always intended for it to be a trilogy before the first film even debuted, and he's a very detail oriented filmmaker, so I'm sure he has a fairly extensive outline on where the sequels are going to go that he'll give to his new writing partners. The only thing really new about this announcement (other than giving the release timeline and announcing new collaborators and so forth) is the expansion to four films instead of a trilogy.
I figure the sequels will go something like this:
- Avatar 2
(Set ~6 years after the first film):
Jake and Neytiri have united all the land-bound clans, because Jake knows that the humans will eventually return in force, and only through unity do they have strength. However, the powerful seagoing clans on the islands feel threatened by this unified tribe and begin raiding coastal villages using technology acquired from the former human colonists through trade and raids. Jake must fight them and eventually win them over to his side. Lots of oceangoing and underwater action. Jake and Neytiri have a child or children (as Neytiri was pregnant in CGI scenes that didn't make it in the final film). Human scientists, mercenaries, refugees, and adventurers from expeditions launched before the fall of the Hell's Gate Colony continue to arrive and are given a choice: stay and obey the Na'Vi's rules for peaceful coexistence and preserving the environment, or return home. Most leave, but some choose to stay and swell the Na'Vi's ranks of allies.
- Avatar 3
(Set ~12 years after the first film):
Jake and Neytiri's children are reaching the Na'Vi age of maturity, and their parents begin training them as warriors, leaders, etc. The military/industrialist human forces return with extensive vehicles, weapons, and personnel to retake the planet. The combined clans of Pandora and their human allies must use a mix of old and new technology to repel the invaders and preserve the planet's environment. The humans are eventually convinced to call a truce after a fierce battle when it's discovered that Earth once had its own global consciousness similar to Pandora's Eya, and that it can be revived and used to return the planet's ecosystem to a healthy status again. Neytiri was killed in the battle, and gives Jake this information after bonding with Eya. Jake is heartbroken, and decides to return to Earth with the humans and his children to awaken "Gaia."
- Avatar 4
(Set ~18 years after the first film):
Jake and his children arrive back at Earth to find it not only environmentally devastated, but torn apart by corporate and civil war. While most treat his mission to revive the Earth consciousness with ridicule and dismissiveness, some factions that wish to keep exploiting resources on Earth and Pandora seek to assassinate him and prevent his mission. They eventually succeed despite this, and Earth begins to cleanse itself of the toxins in its atmosphere. Earth and Pandora begin a new era of shared peaceful coexistence. Jake decides to transfer his consciousness into a human body again and remain on Earth, since Pandora would no longer be the same without Neytiri. His children return home and eventually become the new rulers of the unified clans and human colonists.
I know that sounds like a lot of cheesy hippie Earth-mother stuff, but that's essentially what Cameron is doing anyway, so it wouldn't surprise me if things went that way.