Microsoft V-Chat

Microsoft V-Chat is a freeware 3D chat program released in December 1995 by Microsoft. V-Chat is a multi-user social chat client that lets people interact online from within a 2D or 3D multimedia environment using graphical representations of themselves known as avatars. V-Chat avatars have a full range of gestures that allow users to fully express themselves online. V-Chat enables users to select from a wide variety of existing avatars, or create custom avatars using the V-Chat Avatar Wizard. Sounds, animations, and visual imagery create mood and context for these graphical social environments.[1]

Microsoft V-Chat in Windows XP

It has now been discontinued; it can still be downloaded from other sites, such as download.com. V-Chat was just an experimental precursor to a more ambitious projected called V-Worlds, which was completed but never widely deployed.