Yea ... the campaign I played in that had a Halfling Paladin was the one where I played Grimbold The Mighty, goblin rogue.
The GM even gave me "Bolt" as a bonus feat (if reduced to 1/2 or fewer HP from an attack you may choose, as an immediate action, to drop everything held and take a Withdraw action ... I used that feat ALL THE TIME).
Grimbold's stock in trade was, upon my hearing: "Roll For Initiative" to run and hide, immediately. Even if he got Init (with Improved Init he usually did) ... no Sneak Attacks, just with the running and the hiding. I spent the entirety of one climax combat hiding in a barrel of ale. When the GM would get to me I'd say: "Still have X rounds left holding my breath ... I continue hiding in the barrel." Then, on the last round, he stood up in the barrel like an ugly little Ahnold Schwarzenhoofer in "Predator" with his bow and got a sneak attack in to kill the last badguy.
I totally got away with this method of roleplaying, and got many kudos from the table as a whole, because the Halfling Paladin so completely dominated combat I didn't need to show up. Just riding around with that lance skewering monsters with Rideby and Spirited Charge, usually taking them out with one pop apiece. I wouldn't have tried to play the useless coward otherwise.
--fje