Jai, the impression I got was that once you've taken one level of half-orc/half-elf, you can choose to advance in one of your two parental classes (not both), or continue advancing as a half-whatever. It wasn't clear where the cut-off was. Could you take three levels of half-elf, and 3 more levels of human, or do you get cut off after 3 racial levels, regardless? Not really clear...maybe they go into more detail in Arcana Unearthed (which I haven't read).
And, I agree with you, BG@W. I like the specialized, few-level prestige classes. I liked the Thaumaturist PrC in 3.5 for this same reason...take a few levels to make your mage more of a summoner. I'd love to see this kind of thing replace school specialization, someday. You want to specialize in Invocation? Sure, take a few levels of the Invoker PrC.