There are some obvious limitations to the Nintendo Mii™ characters. These limitations are all the result of the constraints on how much any one character can be changed. And much of those limitations are a result of (I imagine) the fact that Mii™ characters have to be able to be represented through a very small file.
Mii™ characters themselves are saved as a series of flags and simple numeric values that represent a particular characteristic. Contrary to some popular belief, they are not saved in their entirety as a 3D mesh and collection of textures. To visualize a Mii™ you have to read in a value that corresponds to a trait and build your own version of that trait to display the character.
For example, given a Mii™ binary file, you may find that the hair trait has a value of 12. From that, you would go through your own custom graphics (3D or otherwise), find the 12th variation of that trait, and display it on the screen. The Wii™ has all of these graphics stored locally as 3D. My Avatar Editor (and Mii Editor before it) stores all of its custom graphics in 2D.
Now, a common question is, can I do more with my Mii™ than the Wii™ allows me to? The simple answer is no, you can't. This is because you do not have access to the graphics that the Wii™ has stored on its system. Those are the graphics that define the Mii™ characters and as far as I know, you have complete access to those graphics via the Mii™ channel.
Of course here, on the world wide web, from the comfort of your home and with the capabilities of your desktop (or laptop) computer, those limitations shouldn't be a factor. Instead, the limitations fall on me to create whatever graphics you might want to use with your avatar. Because My Avatar Editor will no longer be confined to the limitations of Mii™ characters, there is more flexibility in what can be done.
What this means is that you should expect more from My Avatar Editor - more editing capabilities and more variations of characteristics, etc. However, these features will come later down the road. And I will want to, of course, maintain Mii™ compatibility when necessary. Making sure that can happen among a slew of new features might be a little difficult. So the first release will probably remain Mii™ only until a suitable solution for new features can be devised.