The use of animated talking agents is a novel feature of many multimodal spoken dialogue systems. The addition and integration of a virtual talking head has direct implications for the way in which users approach and interact with such systems. However, understanding the interactions between visual expressions, dialogue functions and the acoustics of the corresponding speech presents a substantial challenge. Some of the visual articulation is closely related to the speech acoustics, while there are other articulatory movements affecting speech acoustics that are not visible on the outside of the face. Many facial gestures used for communicative purposes do not affect the acoustics directly, but might nevertheless be connected on a higher communicative level in which the timing of the gestures could play an important role. This chapter looks into the communicative function of the animated talking agent, and its effect on intelligibility and the flow of the dialogue.