I read somewhere it was said that Na'vi anatomy was similar to human anatomy in that area of the body. So yeah as to the genitals, both species look the same, save for size.

The avatars have inhibitors to prevent any mating between them since they are only used for the drivers to easily get around Pandora. One fanfic had Max deactivate Jake's inhibitors so he and Neytiri can have a baby. IMO it makes sense given Na'vi have an extremely strong sex drive when the urge to mate kicks in. Compared to a human, a Na'vi in the mood is worse as once that kicks in, it has to be dealt with.

As one site mentioned on Na'vi mating, same sex pairings is not uncommon as seen with humans. It does happen. My idea is what if a Na'vi found a human to his/ her's liking? Another Na'vi or an avatar is one thing as many fanfics do go that route, but a human? Who knows. Imagine Jake's surprise if a woman from the Omaticaya told him she was in love with a human woman. He is still human in the mind and well his own personal thoughts would cloud his brain. XD Neytiri slaps him back to reality. LOL