I'm afraid to say we have no ideas ; we just know a thing : queues (the neural antenna-like thingie on the back of Na'vi and other creatures heads, used for "tsaheylu") do not play any part in the reproduction system, since they're barely a brain extension - it would be like if you had some synapses (brain links) hanging from your head. We can only do suppositions : Neytiri and other Na'vi women have breasts, and since Na'vi cover pubis, that means there must be something to hide - genitals. This would indicate they reproduce like humans. On the other side, James Cameron stated at an early stage of filming that Na'vi weren't placental mammals - our type of mammals, and consequently they might not reproduce like us. But at an early stage of "Avatar", Na'vi had gills, and were more fish-like. So who knows… Conclusion : wait for Avatar sequels and hope they will explain this, since we have no certitude. Hope I've been useful and I could answer your questions.
add: The Na'vi connect their queues during mating to create a strong emotional lifelong bond, but does not in itself lead to reproduction
Correction- We do know how they reproduce if you read the pandorapedia in James Camerons Avatar the game or the activist survival guide its states that they reproduce similar to humans just that they link their queues... or you could have payed more attention during the movie... =P