According to 1UP, SEGA and Microsoft have announced that Banjo-Kazooie and Xbox Live Avatars will be playable characters in the Xbox 360 version of Sonic & SEGA All-Stars Racing.
They're the only non-SEGA characters announced so far for the kart racer, due early next year and being developed by Sheffield's Sumo Digital. SEGA reckons it will be the first time Avatars are playable in a racing game, implying the game will beat Microsoft's own Joy Ride to the market.
Banjo and the Avatars will be joining an eclectic cast of SEGA faces: not just Sonic, Tails, Shadow and crew, but AiAi from Super Monkey Ball, the Samba de Amigo monkey, Beat from Jet Set Radio, Alex Kidd, Billy Hatcher and Shenmue's moody teen hero Ryo Hazuki (driving either a motorbike or his famous forklift truck).
A rumour round-up on Wikipedia names a number of other, unconfirmed possibilities: Ulala from Space Channel 5, Akira from Virtua Fighter and Vyse from Skies of Arcadia to name three. SEGA has also been wrangling with ToeJam & Earl creator Greg Johnson over the rights to the iconic nineties duo.
Fan service as only SEGA can do it. Sonic & SEGA All-Stars Racing is also due for release on Wii, PS3, PC, and DS, but there's no word of special guest apperances on those formats.