NXE doesn't look like anything more than MS stealing a little of this (Miis) and a little of that (iTunes Cover Flow) from Nintendo and Apple. Par for the course for MS.
Home, on the other hand, is a full blown MMO with every aspect of your PS3's local file system representable as avatars and objects that can be shown-off and/or shared in the MMO universe.
Apples and oranges.
Now, as for the 'look' specifically, I do think Home looks bad, and I don't mean bad as in kewl, but bad as in awful. That's just my personal taste. I would have much preferred a more cartoony/casual look like the NXE avatars and not the realistic art design of a Second Life. Frankly, I'd rather have LBP Sackboys be the 'official' avatar of Sony's brand.
The irony of the realistic vs not-realistic debate is that it's easier to get a Nintendo Mii or Microsoft NXE avatar to achieve a close resemblance to yourself thanks to the nature of them being caricatures. Anyone that has lost themselves for an hour screwing around with the sliders and RGB color values for hair in something like Tiger Woods or Fallout 3 knows what a waste of time it is, since after an hour or more changing your cheekbones and the protrusion of your chin and the depth of your eye sockets, your damn avatar STILL doesn't look anything like you!
