Umbran said:
Let's take Spot. Spot is half Black Lab, and half Standard Poodle.
Then take Rover. Rover is half Black Lab, and half German Shepherd.
If we breed Spot and Rover, we will never get a full blooded Black Lab out of the mix. While the resulting dog may be rather lab-ish, it also may not. It's a mutt, plain and simple.
Exactly.
If this is just for a one-of-a-kind offspring, I'd be tempted to emphasize the random outcome of such an offspring. For each of the affected traits, roll a d4. 25% chance the offspring gets the Elf trait, 25% chance the Orc trait, and 50% chance it gets the human version of the trait. At the end, adjust some of the numbers (preferably by moving them closer to the 1/2 orc or 1/2 elf side) to gets something roughly LA+0.
For example, Elves get +2 Dexterity, –2 Constitution, whereas Orcs get +4 Strength, –2 Intelligence, –2 Wisdom, –2 Charisma. Let's roll randomly, and decide to give the offspring Human Dex, Elf Con, Orc Str, Human Int and Wis, Elf Cha... that means -2 Con, +4 Str.
Now let's look at the other Elf traits. (Some more random rolling...) offspring gets Low-Light Vision and a +2 bonus on Listen, Search and Spot, plus ability to sense secret doors. Other Orc traits... (roll, roll...) offspring gets Favored class: Barbarian.
Not too bad overall, although somewhat overpowered. So let's reduce some of these closer to 1/2 orc and 1/2 elven stats... how about +2 Str / -2 Con, Low Light Vision, +1 on Listen/Search/Spot and Favored Class: Brb. Sounds like a viable PC to me...
For the same money, you could have gotten something like +2 Dex, -2 Wis, Favored Class: Wizard, and Darkvision. Or -2 Con, -2 Cha, immune to magical sleep, +2 vs. enchantments, an d Light Sensitivity. Ouch... could make for an interesting NPC though!
Again, I would only use this on a case-by-case basis. Once you get a whole race of these type of crossbreeds, it makes much more sense to write up something a bit more uniform and predictable.