Here is how I view the major Kataang/Zutara arguments:

The Avatar State:

The fact is, this is the only thing that is standing in the way of Kataang. Zutara shippers claim that should Aang successfully open the 7th chakra, he will forget that he loves Katara, forget that he ever loved Katara, etc. Quite apart from how ridiculous that seems, there is also the entirely open matter of what it means to "let go" of attachment. To solve this unsolvable solution I suggest that we turn to the ultimate source of all wisdom (other than avatar) - Star Wars.

Anyone who has watched the Star Wars movies is familiar with the fact that the jedi too seem to have a bit of a problem with "attachment to people" (what with it leading to the dark side and all). What not so many people are aware of is that the jedi do in fact find a solution to this problem in the series of novels that tell the story of what happens after "Return of the Jedi". Here is a direct quote from one of the novels:

"That's what attachment is, isn't it? It's not loving somebody. It's not marrying somebody. It's not having kids. It's being where, if somthing gooes wrong, there's nothing left of you. It's being where, if the person you love dies, you start functioning like a droid that's been fitted with a restraining bolt".

I think that this definition could easily apply to avatar. Letting go of attachment doesn't mean loving what you were it attached to any the less. It means that if you have to make a choice between saving the person you love and saving the world, you have to be able to accept the pain of letting go of your love in order to save the world. After that, you can mourn the person you loved, but you have to be able to keep on living and get on with your life. You can feel the attachment, but you cannot allow it to have any hold over you.

Once Aang realises that (as I imagine he will in "The Old Masters"), he'll be fine.

For those who are curious, Luke Skywalker does indeed go on to marry and have kids. If Luke Skywalker can do it, why not Aang?

And for any who doubt the inherent wisdom of Star Wars - I'll be waiting for you with a lightsaber.

Aunt Wu's Predictions:

Lets deal first with daveshanFromGMU's opinion on Aunt Wu's line: "I can see that he's a very powerful bender". Later in the episode, Sokka says "...sometimes I forget what a powerful bender that kid is". There is an emphasis on the word "what", because it alters the sentence: if Sokka had simply said "I forgot that that kid was a powerful bender" that would have been different. As it is, the word "what " does the same thing to "bender" as the word "very" does; instead of simply confirming Aang as one of many powerful benders, it elevates Ang's power, AKA, a very powerful bender. Sorry if that was a bit confusing.

There's also Aunt Wu's prediction that Aang "will have no love in his future". But by the end of the episode, we have Aunt Wu herself assuring us that people are free to "reshape their own destiny". If that isn't a blatantly obvious statement that what she said might not necessarily apply, I don't know what would have been. And let's not forget Jeong Jeong's revelations about destiny two episodes later. His musings on the subject are not quite as easy to decipher, but I think that it would be fairly close to thnk that he's basically saying "destiny is not absolute"".

Either way, it seems fairly obvious that by the end of this "The Fortuneteller", Katara was considering Aang as potentially her "very powerful bender". As well as her unambiguously wonder-filled staring at Aang after he stops the lava, there is also the notable fact that it is in the episode immediatly after 114, "Bato of the Water Tribe", that she kisses Aang on the cheek for the first time.

While we're on the subject of 114 and 115, there's also the symbology of Katara's betrothal necklace. As well as making a necklace and giving it to Katara, Aang also manages to give her a genuine betrothal necklace. If that isn't blatant symbology, I don't know what is.

Avatar Roku:

As much as some Zutarians like to claim that Ta Min might not have been the attachment that Roku had to give up, it seems fairly likely that she was, since the story made a point of drwaing a comparison between Katara and her when Roku is advising Aang in the ways of love. There'salso the fact that during the last few minutes of the episode Roku demonstrates perfectly the ability to let her go as described in the first part of this post. When the volcano on Roku's home island errupted, Roku probably wanted nothing more than to make sure that she was safely off the island. Instead, knowing that his duty as the Avatar was to hold back the lava until everyone was safely off the island, he let go of her hand and went back to make his stand.

The Cave of Two Lovers:

The fact is simple: Katara was the one who suggested the kiss. Any ambiguity over her reactions later can be attested to Aang's bumbling initial response. Oma and Shu story fairly close, but I'd say that it makes more sense as a metaphor of Kataang than Zutara. Instead of going through it myself I simply refer you to the relevant episode of Chaobunny's guide to Zutarian logic.

DoBS Kiss:

The fact that Katara had a sad look on her face after the kiss is the only Zutara has got. And that Sad look is easily explained by the fact that a person who has just declared his love for her is about to go to what he admitted might be his death.

The Trailer:

Saying that Katara was looking disgusted when she pulled away is definitely incorrect. If I were to put a name to the emotion she was displaying it would be horrified. Now why would Katara be horrifed at the prospect of kissing Aang? Whatever Zutarians might say, it is fairly clear that she enjoyed the kiss itself, so it cannot simply be that Aang is a bad kisser. Could she have developed feelings for Zuko? Nope, then she would have been looking guilty. Could it be that she just doesn't feel that way about him? If Katara hadn't figured it out after DoBS, then I'd be really suprised. Katara was shocked, so somthing about this kiss will be new. If she was simply resigning herself to telling Aang that she didn't like him she would be looking sad to break the news to her friend. I think that the only real explanation is the one kataangers have been shouting for months: she found out about what Aang thinks he knows about the 7th chakra. As for the Katara/Zuko hug, I see nothing beyond what I see in every piece of Zutara evidence: Katara is going to forgive Zuko.

Aang is short, bald, and ugly:

I disagree with anyone who says Aang is ugly, at least in season three. And anyway, that's one of the things I like best about Kataang - it is not some shallow romance based on looks (AKA jetara), but is actually a genuine liking each other for who they are.

Why ship Kataang?:

In the final analysis, I like Kataang because it is a genuine, non-shallow romance that fits well with both the storyline and the character development of Aang. Those are the rational reasons anyway. But as everyone who has kept up with this thread knows, shipping is anything but rational. What you ship matches what you like, and I have liked the idea of kataang ever since The Boy in the Iceburg. Plus, I also ship maiko, especially after the Boiling Rock.

Any hope left for Zutara?:

Unless somthing big happens in the next 2 episodes, Zutara is cactus. Not even the brilliant writers of avatar could pull a long lasting romance out of a hat during a finale. Even Yue/Sokka was begun in the episode immediatly before the season 1 finale.

Anyway, that's my opinion of the major Zutara/Kataang arguments.