Addenda-

Race as class, another argument I see both sides of, and agree with both alternately. I prefer the Human-centric implied setting of early D&D, Demi-Human racial classes and level limits help enforce this. I'd actually prefer a completely human world, but most players balk. It seems the Tolkien-esque multi-racial paradigm won over a more Conan-esque setting for fantasy adventure games. I run a lot of “historical” settings, so it really isn't a problem, particularly, for me, but “standard” D&D settings are always multi-racial, and later editions of the game make them the absolute equals of the Human characters.

I kind of like the idea that they are maybe fading races, their age has passed, and they are relics and anachronisms, leftovers from a more magical time; now is the age of man. I can get behind that implied setting and run with it. This also makes racial classes and/or Demi-Human level limits make more sense.

In my Garnia campaign setting this is almost what's going on, the Elves are a defeated species, Dwarves are exiles, and Halflings and Gnomes are not noteworthy enough to have any real history of their origins. Half-Orcs exist, as do Half-Elves, but I came up with a reasonable explanation as to why both Orcs and Elves could breed with Humans, but not with each other. The age of man is certainly happening there, the age of the Orc is impending. Garnia is, other than the Celtic veneer, a pretty standard AD&D setting though. Garnia was designed, from the get go, as a standard AD&D setting, with all the bells and whistles, all the melange that implies.

So I guess what I am saying is that, while I might actually prefer the “standard” D&D racial classes for Demi-Humans, I will not go further than the AD&D multi-class capable, level limited versions; that's where I draw the line.

None of this is new from me, I just need to re-state it from time to time. I argue for racial classes, my wife argues for multi-class capable.