I went for option 3 (no ability mods but minor racial features), but like TwinBahamut, I dispute the "minor" part of that. While I wouldn't go with his approach of having some really major racial traits, I don't think stonecutting, or things of that ilk, is really up to par.
Basically, at first level I think races should get the stuff that every member of the race gets - probably some skill modifiers, low-light vision if appropriate, and perhaps a minor power or two. Then, as you gain levels, your choice of race opens up the option to take dedicated racial feats and/or powers, and use dedicated racial items.
And that's basically it.
The reason for avoiding ability score modifiers is that these seem to immediately become the focus for choosing a race. Want to play a Fighter? Well, you best pick from these races, because otherwise you don't get that juicy Strength bonus. It has two deleterious effects, IMO: players choosing a given race solely for the ability mod (giving rise to the "humans with funny noses" thing); and there being a massive penalty for playing against type.
Since all of the proposed ability score generation methods allow for the player arranging his stats as desired, there is no need for ability mods - if you want your half-orc to be stronger than the average, just put a really high score in Strength!