Quasqueton; I've seen that happen. That's why a chargen session, or portion of a session, at the beginning of the campaign, where the players can work together and the GM can help guide them away from backstories that simply won't work, is my preferred method.
I like backstories, but I like them to start out pretty bare and skeleton like at the beginning, and gradually fill themselves in a bit over the course of the first few sessions. As a player, it seems it takes a session or two for me to get a handle on the PC anyway; so I'd prefer to not have to come up with a lot of details until I've seen the PC in action, and seen what he does. A lot of times, I get a lot of great ideas for the character in the first few sessions.
Here's an example; for the last six weeks or so I've taken a break from running my Dark•Heritage game because I've had three successive waves of family in town, and then the Detroit Gameday to manage. To get our fix, one of the other guys ran a quick Dungeon magazine adventure, and I whipped up a human ranger character for that. Although I had given the guy a little bit of thought, I wasn't really sure what his quirks and the like where, but based on a fairly offhand comment I made, the character developed into this real elfophile (it helped that we had a female cleric of Corellon Larethian (sic?)) in the group that he could suck up to. That developed into quite an interesting concept and backstory, and really took on a life of its own.
If I had planned everything out ahead of time, it would never had had a chance to happen, though.