Well...I, of course, must disagree.
With what? Not with a lot of the suggestions for differentiation...those are all great. Differentiation should be done, IMO, mostly by the skill sets of the PC/NPC. You can call them skills, feats, traits, disadvantages, or whatever you like, but the biggest differences in terms of game "feel" can be accomplished in that manner. Personally, I don't feel that ability scores modifiers should be used because there is not that much of a difference between human ethnic groups in the real world. If there IS a difference, it is generally because of an emphasis placed on that score over others in that culture or sub-culture, which can be represented by putting the character's best or second best ability score in that particular statistic rather than a modifier. I look on modifiers as something that is inherently BETTER (or worse) in the race than as a particular emphasis that is placed.
My disagreement is with the whole political-correctness idea. OK, it's great and all to be thought of as inoffensive but, in YOUR game, do as YOU please. If it offends your players, then maybe you shouldn't do it, but they're YOUR players, so you should know the limits.
MY own world is not at all politically correct. Not at all. The real world is not and neither is my campaign world. DIFFERENCES are what makes the world go. If everyone was politically correct and didn't offend anyone else, then there would be no war, no strife, no reason for adventuring...perhaps someone should publish such a setting, d20 Utopia, where everyone is a pacifist and everyone is a socialist. The monsters share their treasure with you and the PCs play a bunch of farmers who gain experience points by bartering their own individual crops for goods and services, being careful not to cheat anyone...
It's fairly easy to use ethnic groups in a gaming world. It is done, anyway, though normally with monsters rather than with other humans. As an example:
Orcs? They're ugly, smelly, violent creatures who take what they want. They have to be destroyed, right? Well, from the point of view of the orc, he's not doing anything wrong. Ugly? Born that way...and that's subjective, anyway. He might be the Brad Pitt of the orcish race. Smelly? Well, a particularly vile odor to one nose might be the sweetest perfume to another. Violent? How else can he get what he needs for him and his tribe to survive? Everyone hates him because he's ugly and he smells and won't deal with him, so he is forced to banditry. Of course the orcs are out to get everyone...everyone is out to get them. If orcs were in the modern world, people might be leaving their own country and going to the country of the orcs to act as "human shields" in strategic orc lairs so that the archmages wouldn't (maybe) blast them to pieces.
I use ethnic groups and religious differences extensively to fuel the wars of my world. It happens in our real world, too. Anyone hear of Jews and Moslems (and Christians, too) fighting in the Middle East? How about the ancient hatreds in Bosnia (which are religious AND ethnic in nature)? How about the Crusades? Political differences fuel hatreds, too. Tiananmen Square was about the suppression of dangerous capitalist ideas by the socialist powers-that-be in China. Look at our own two-party system. It doesn't happen nowadays, but duels were once fought in this country over political differences.
I don't use real-world ethnic groups in my game because the world is entirely made up and I hate copying things from the real world or even other fictional worlds, but I would not hesitate to do so if I were running some sort of campaign set in the real world or a reasonable facsimile. Of course, my players are all mature (well, ok, that's sometimes open for debate) and accept certain realities of life that many people do not. Most other gamers DO NOT have my situation.
It's all up to the gamemaster to decide, though. It's YOUR world. If your players will enjoy it, then do it. If not, then there is no real point.