I'm mixed but mostly positive on 3.5 gnomes.
I like bards being their favored class, although more emphasis needs to be placed on the non-minstrel aspects of the class in the baseline description. "Races of Stone" also missed out on a bet by not including Monte Cook's (I think) Trickster prestige class from the first 3E Dragon Annual. There needs to be a WotC prestige class other than the Divine Trickster (which is an odd little PC) that makes the bard more tricksy.
I also think "Races of Stone" (or even the PHB) missed a bet by not including a feat that makes Illusionist a second favored class for gnomes. The designers shouldn't be a slave to what's come before, but they do need to form official continuity links for those who liked things the way they are.
And lordy, the little nose thing is lame. You have to read the captions, where provided, in the core books to tell the difference between a gnome and a halfling-kender, and that's not fair to either race. (And it may be just me, but I'm hoping one of the new quickie races in "Races of the Wild" is a more hobbit-like halfling race. I like kender, I guess, but I'd rather they were added to the PHB instead of turning halflings into them.)