Something like that, yes. She'll probably still be entirely herself, but she will have absorbed all of Eywa's knowledge, allowing her to (among other things) communicate with Eywa at will and speak on Eywa's behalf with anyone else. This will be very important, as the reason the RDA got kicked off Pandora is beauase they didn't know Eywa (rather than the Na'vi) is in charge of Pandora. Grace will facilitate direct negotiations between Eywa and the RDA, most likely in the 3rd movie when they return in force. Humans would NEVER be able to exist peacefully on Pandora without being able to communicate with Eywa in some way.
It's very similar to Lord of the Rings, actually. Grace, as she was in Avatar, is like Gandalf the Grey. Gandalf the Grey was killed in the first film, but in the second, the primary deity sent him back in a much more powerful form, Gandalf the White. That's EXACTLY what will most likely happen to Grace, the returned Grace will be like Gandalf the White.
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