Augmented Reality (AR) and Virtual Reality (VR) are pushing from the labs towards consumers, especially with social applications. These applications require visual representations of humans and intelligent entities. However, displaying and animating photo-realistic models comes with a high technical cost while low-fidelity representations may evoke eeriness and overall could degrade an experience. Thus, it is important to carefully select what kind of avatar to display. This article investigates the effects of rendering style and visible body parts in AR and VR by adopting a systematic literature review. We analyzed 72 papers that compare various avatar representations. Our analysis includes an outline of the research published between 2015 and 2022 on the topic of avatars and agents in AR and VR displayed using head-mounted displays, covering aspects like visible body parts (e.g., hands only, hands and head, full-body) and rendering style (e.g., abstract, cartoon, realistic); an overview of collected objective and subjective measures (e.g., task performance, presence, user experience, body ownership); and a classification of tasks where avatars and agents were used into task domains (physical activity, hand interaction, communication, game-like scenarios, and education/training). We discuss and synthesize our results within the context of today's AR and VR ecosystem, provide guidelines for practitioners, and finally identify and present promising research opportunities to encourage future research of avatars and agents in AR/VR environments.