While I started with 2nd edition BB (the one with the polystyrene board) I felt the game really didn't shine until 3rd edition. The advent of the cards (Dirty Trick, Events and Magic Items) and the new blocking dice as well as an overall balancing of the teams helped to make 3rd Ed the best version of BB
imo.
For the OP while dwarves are slower than average their high armour and general toughness more than makes up for it. In the BB league I was in for 2 years there were 3 dwarf teams, one year 2 played each other for league champion and the 2nd year one of them was in the championship game. I think there were about 14 teams/players total in that league. The main thing that kept the dwarves so viable is the fact they had so few lasting injuries during the year.