Characters may choose to be: Human, Elf, Dwarf, Gnome, or Halfling.
A more detailed discussion of these races and some background on them, as it applies to my game, can be found in a previous article: What Player Races Should You Allow. As the article states, the non-human races are actually half-human offspring, exiled by their parent race. They have been universally accepted into human society and have nothing to do with their non-human relatives.
Humans receive two ability points to distribute however they like. They also receive one extra feat and five extra skill points.
Elves receive: +2 Wisdom, +2 Dexterity, +2 Nature, +2 Perception, and +2 Will Power.
Dwarves receive: +2 Constitution, +2 Wisdom, +2 Dungeoneering, +2 Endurance, +2 Fortitude.
Gnomes receive: +2 Dexterity, +2 Intelligence, +2 Arcana, +2 Stealth, +2 Armor Class.
Halflings receive: +2 Dexterity, +2 Charisma, +2 Acrobatics, +2 Thievery, +2 Reflex.
Each race has access to certain feats unique to that race.