I am using both the Book of the Righteous and Deities and Demigods, using the Book gods as the deities of the most powerful continent, the Greyhawk gods as deities of the next biggest and so forth with many of the pantheons, and adding a few (such as the racial pantheons from the old Dragon magazines).
The avatars exist for the Greyhawk and other deities in the D&DG (obviously), so I am creating avatars as per the D&DG as needed for the other gods and goddesses.
In my campaign, the deities are very active, when the mood strikes them, but usually intervene via avatar, only making a personal appearance when it is time for onlookers to think about running in the other direction.
I agree in part with Green Ronin's stance on racial gods, but then again, I like the idea of racial pantheons, focusing more directly on a particular aspect of say a gnome's darker side. To me, a racial pantheon is similar to the Norse and Greek pantheons existing at the same time, the gods don't all crossover, and Odin isn't Zeus, but serves (for the most part) the same role.
hellbender