I don't question the pseudo science stuff in Avatar, but when it comes to stuff that should make sense, birth, that's where I start wondering.
We haven't seen any evidence that reproduction would be any different from real-life reproduction. Sure, they don't talk about it freely, being a kid's show, but just because we don't see it, doesn't mean it doesn't happen. Obviously.
I know I'm overthinking this sort of thing, and it's a weird thing to think about, but I'm just trying to make sense of some stuff.