Like the name suggests, the Spirit World is where the spirits of the Avatar world reside. This world is opposite of the natural world (where everyone *living* resides) and for the most part, these two worlds do not interact with each other.
Only the Avatar can act as a bridge between these two worlds, and bring peace when problems arise between them.
Spirit World Inhabitants
Although there has so far been limited information released on the spirit world, we do know that the Great Spirits, previous Avatars, and other creatures reside in the spirit world. It's currently unknown if *everyone* from the natural world will end up in the spirit world, or if there are different layers to it & etc. But here is a list of inhabitants that we do know of.
This is the first creature we see in the swamp area of ep 1x20. It is all white and has red eyes. Not sure if this crane is particularly important, or just another regular spirit creature.
Curly-Tailed Blue Nose
Seen sitting outside of Koh's lair in the swamp area in ep 20, this monkey had its face stolen by Koh. Although I'm not sure, it's possible that one of Koh's faces (seen on the left) is this monkey's stolen face. The facial features are based on the Mandrill monkey, but the tail is not.
Hei Bai is the Spirit of the Forest. Though I am unsure if it is all forests, or just one area in the Earth Kingdom shown in episode 1x07, where Hei Bai was first seen. Hei Bai is also known as the 'black and white spirit', which makes sense since "Hei" and "Bai" are Chinese for "black" and "white". ^-^
Hei Bai's normal form is that of a giant Panda Bear.
But when angered, Hei Bai transforms into a larger black and white monster with 6 limbs.
While in this form, Hei Bai has increased physical strength, lightning-quick agility, and a sonic roar that can demolish stuff.
During the Winter Solstice in ep 1x07, Hei Bai was destroying a village because his forest had been burned down. But Aang helped Hei Bai calm down with evidence that his forest would grow back, and they've been friends since. Hei Bai was also seen in the swamp area in ep 1x20, and helped Aang get back to the natural world.
Koh the FaceStealer is a very old spirit, possibly even dating back to "near the beginning" as Roku said Koh was one of the few spirits who remembered Tui and La's mortal forms. He lives in the swamp area of the Spirit World, underneath the base of a giant tree. If any person or creature shows emotion while Koh is watching, he will steal their face. More info on Koh can be found here.
This primate is certainly special, but I don't know if he is a Great Spirit or not. Either way, he speaks in human tongue, is dressed similar to a monk, and is very intent on his meditation. He isn't particularly friendly, especially when his meditation is interrupted. He was seen in the swamp area in ep 1x20.
Orb / Spirit Firefly
Also seen in the swamp area in ep 1x20. Not sure if it is a formless spirit, or a really tiny creature that glows. But when it flies it makes this cute ringing sound, and when Aang captured it, the tree branch beneath him disintegrated. Interesting power!
Avatar Roku has spoken to Aang thrice from the Spirit World; once from the mountains in ep 1x08 (solid form), from the swamp in ep 1x20 (as Aang's reflection in the water), and briefly in the clouds in ep 2x01 (spirit form). More information on Avatar Roku can be found here.
This Fire Nation dragon was Roku's animal guide (like Appa is to Aang) back when he was the current Avatar.
In ep 1x07, Roku sent this dragon to help Aang who had stumbled into the spirit world. Roku's dragon spirit has only been seen in the natural world, and once with Roku in ep 2x01.
Besides flying, Roku's dragon also has the ability to communicate telepathically. By placing one of its whiskers on a person's forehead, the dragon is able to show that person what it is thinking.
Tui and La (Koi fish)
Tui and La are the Moon and Ocean spirits. Always together, they are constantly in a state of Yin and Yang. According to Avatar Roku, they crossed over into the mortal world very near the beginning, and they secretly live inside the North Pole oasis.
The white koi fish is the mortal form of the Moon spirit (Yang), and the black koi fish is the mortal form of the Ocean spirit (Yin). "Tui" and "La/Na" are Chinese and mean "push" and "pull".
Tui the Moon Spirit
When Princess Yue of the Northern Water Tribe was born, she was very sick and her parents were told that she would die. They pleaded to the Moon Spirit and part of the Spirit's life force was given to Yue. 16 years later (in ep 1x20), Zhao killed the white koi fish in an attempt to weaken the Waterbenders. It worked, and the moon vanished. To restore balance, Yue sacrificed her life to the dead fish in order to give back the Moon spirit's life force. In doing so, her spirit merged with it and she became the new Moon Spirit.
Lat the Ocean Spirit
In retaliation to Zhao's attack, Aang activated his Avatar spirit and merged with the black koi fish to bring out the Ocean Spirit. Made entirely from the ocean with its head shaped like a fish's; and Aang in the "heart" controlled their movements. Together, the Ocean Spirit/Aang pushed back the invading Fire Nation with devastating physical and Waterbending attacks. Once the Moon returned the Ocean Spirit retreated and Aang was released. But before the Ocean Spirit returned to the black koi fish, it dragged Zhao down into the water.
Seen in the swamp background in ep. 20, this wolf creature is huge. Nothing else is known about it, but the facial features look like the lower carving on the Northern Water tribe totem poles.
This may mean that the wolf represents something significant in the Water tribe culture, and this particular wolf may be the Great Spirit of that. Another note: in native northern Pacific cultures, the wolf usually represents powerfulness, and healing.