I've played gnomes ever since I got in D&D some 15 years ago.
Mechanically, gnomes and halflings share two problems: low speed and Strength penalty. These two penalties can really make some character roles difficult to pursue.
Flavour wise, I always thought halflings had less flavour than gnomes. It's true that gnomes are somewhere between dwarves and elves, but they're actually neither. Halflings, on the other hand, come in three varieties: human halflings (lightfeet -- or hairfeet in earlier editions), dwarf halflings (stouts) and elf halflings (tallfellows).
But, halflings have one advantage over gnomes -- they're "sexy". They, like elves, are always portrayed or described as handsome or athletic (well, in 5(.5)e, anyways

). Just look at the character line-up in the 3(.5)e PH.
Gnomes, OTOH, in 1e/2e looked like large-nosed elderly men, and in 3e they've got exaggerated, child-like features . Plus they have the whole Dragonlance tinker gnome baggage thing going on (halflings are also somewhat haunted by the kender heritage, but it's significantly less annoying than the baggage of tinger gnomes).
The initial 3e favoured class: illusionist didn't help either. The 3.5e had the right idea with bard as the favoured class, but bard has problems of its own, and the choice didn't really help much.
That's another point for the halflings. The big four of adventuring groups -- tank, healer, blaster, scout/trapfinder. Gnomes don't really have a defined part in any of those roles (half-eves are similar in that regard, but they at least have a 30-ft. speed

).