There's plenty of ways to make halflings cool. The trick is to avoid using the "annoying aspects" (Kender) as species-defining characteristics. Also, understand that an adventuring halfling isn't the same as a stay-at-home halfling, so "stay-at-home" is a bad racial stereotype because it provides nothing for the adventuring halfling, who's obviously an exception.
There's a few alternative racial traits you can play up to create "cool" halflings. Mostly, it involves just thinking about what it would be like to be a halfling in a D&D world. In other words, you've got to look both at places where their size is actually an asset, and things they might do to compensate for their small size.
Against larger opponents, it's natural (and smart!) to rely on ranged weapons, rather than going toe-to-toe. So, halflings might be have a cultural predisposition to ranged weapons - being natural archers, slingers or whatever. In addition, since they're small, they might have a relatively easy time in forests, being able to move through them more easily than a larger race. Large mounts, which halflings also use very little, are less useful in the woods, making that a natural place for the wee folk to hide. George Martin plays this up (though none have yet been shown) with the "Children of the Forest" in A Song of Ice & Fire. He also gives them jet-black skin of the drow. However, IF you like ranger elves, this puts the two on common ground, not a good idea. If you want forest halflings, I suggest sea elves.
When dealing with magic, "size matters not." So halflings might have a strong cultural bias towards using enchantments. As a result, magic might be lot more common in halfling society than it is in those of the "big folk." Personally, I like using this for gnomes. If I'm going to use both, I personally like gnomes as the fey trickster race, and their racials (in 4e) support them as good wizards. Of course, halflings can be good sorcerers and bards, so magic isn't out of the question - but playing it up too much makes them and gnomes too similar.
One of the most natural things is what 4e does. If elves have the forests, and dwarves the mountains, then what is left for halflings? Well, if you think about it, a small race has a good incentive to be both gregarious and nomadic. And in more "civilized" setting, your travelers tend to be merchants. But given their size, halflings might have a rough time transporting goods overland. But on water, it's less of an issue. That gets me to halflings as sailors and river traders. That works for me, and it's got a fair amount of flexibility.
One can also play up halflings as a relative of humans. Under this theory, halflings are actually not as distinct from humans as, say, elves and dwarves. Halfling society would tend to be very human-like, but with differences. Traditional differences are things like not buildling cities of their own, or being relatively more peaceful, or not being as "learned."