1. A system operative to execute and train at least one avatar in an interactive environment for each of one or more users, the system comprising: a plurality of client devices coupled to a network, each client device including at least a first knowledge engine operative to continuously monitor each user's response to a plurality of events in the interactive environment, the first knowledge engine including an event monitoring component, a response monitoring component and an operational mode management component; and at least one server device coupled to the network including a memory, a knowledge base and a second knowledge engine, the second knowledge engine including a pattern analysis and recognition component, a categorization component and a knowledge base interface controller, the at least one server device operative to receive the monitored user responses from the first knowledge engine and to cause the at least one avatar to execute one or more actions in the interactive environment based on pattern analysis of the monitored user responses.