To clear things up:
1. You _must_ be in 1 vs 100 Live play (NOT Extended)!
2. If you are in the CROWD (as most of us usually are), the opportunity to use avatar action is after the answer to the question is revealed. You will be standing behind a railing (it was purple for me). If you start pressing Y, the railing will act like a bar meter. The more you press Y (you must press Y quickly and repeatedly, not hold it), the higher the lighted bars go. When the lit bars reach the top, you have maxed out your avatar and it will do a special move (once it was the new "monkey dance" for me). Wait for nine more questions and repeat. Pay attention, you have to be fast. There are a few other opportunities beside after questions (stat and commercial breaks), so pay attention (you are always behind the railing). I just got it this way, so I know it works. Hopefully this guide is a little clearer than the others.
3. If you are [lucky enough to be] in the MOB, I am guessing it is the matrix of lights behind you that is the meter. Again, when pressing Y affects the meter, press Y quickly and enough to get the lights at the top to light up. You'll see that special little extra action. Repeat nine more times.