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There’s no question that James Cameron is a visionary, as evidenced in Terminator and T2:Judgment Day. But how groundbreaking is his next film, the stereoscopic 3-D Avatar? Cameron explains and even apologizes for making Titanic. Ok, not really.

The Hollywood Reporter spoke with Cameron about the highly anticipated sci-fi film, already in production for 2 1/2 years, and he explained that the film will be “about 60% CG animation, based on characters created using a newly developed performance capture-based process, and 40% live action, with a lot of VFX in the imagery.

“It’s the most challenging movie I’ve ever made,” Cameron said.

But unlike some visionaries who we won’t name (cough, George Lucas) Cameron seems to understand good storytelling is paramount to visual effects.

“You have to make a good film that would be a good film under any circumstances,” he said.

Avatar is set to be released December 18, 2009. You can read the rest of Cameron’s technology filled interview here.