Avocado roots, like those of most other plants, need oxygen, so the seedlings would actually grow better in soil than in water. When growing a seedling in water, the water should be changed at least every couple of weeks, before it gets dirty and depleted of oxygen. One way to speed germination in soil is to remove the parchment like seed coat and slice a thin layer from both the top and the bottom of the seed before planting. In water or in soil, set the seed with its base (the wider portion) down.
Indoors, avocado plants are often gangly and sparse with leaves. One reason for the plant's gawky appearance indoors is light. Lack of sufficient light causes stems to stretch for it. Another reason is that avocados shed many buds along their stems, buds that might have grown into side branches. The result is a plant stretching out for light, sending out new growth mostly from the tips of the branches and shedding old leaves.
There are several things indoor gardeners can do to keep their plants more attractive. Most obvious is to give an avocado tree bright light. Also, the stretch for light is exaggerated when warmth stimulates growth, so the ideal spot for the plant is at the brightest window in the coolest room. Beyond that pruning back a stem or pinching out its growing tip stimulates branching by awaking dormant buds (not all are shed) further down the stem. There is nothing that can be done about the shedding of older leaves.
Every indoor avocado grower holds out hope for fruit from his or her plant. This is always a possibility, but realistically it is not likely to happen. The time from seed to fruiting under good growing conditions is about a decade. Indoors, this time period is lengthened and plants may never experience good enough conditions to ever flower, let alone ripen fruit.
Lack of fruit on an indoor tree is no great loss, because seedling trees rarely produce fruits as tasty as those on commercial trees, which are grafted to good-tasting cultivars. Indoors, avocados are best looked upon as a houseplant that is inexpensive, fun to grow and somewhat attractive.