I've used different things for flavor and twists.
The most common is transworld fantasy. Generally my favorite fantasy books are of that type; The Covenant Series, the Legion of Videssos, Caramonde and when younger Spellsinger, Oz and Narnia. So I use that in roleplaying... and it something that is at least not uncommon in literature, but you never see it in gaming. I usually run such things in HERO just because it is easier to keep things balanced, but a d20 version would work almost as well no. When I ran my last game that way, which lasted about 5 years, the PCs (which came and went as the campaign progressed) were a number of natives, a cyberpunk character, and old west doctor, a Jedi-like character, a low powered superhero, a Mgyver/James Bond cross modern superspy, and a pulp Cthuliu investigator. The game worked very well and everyone had a blast.
I tend to like moral absolutes in my game. So I've run games that are a paladin's heaven. When I do so, I have two levels of evil ... first there is "everyday evil" with a small e.. thieves, con artists ect fall under this catagory. A paladin cannot do anything with such people that anyone else couldn't. There is also "supernatural Evil" - Evil outerplanar creatures, most Undead, any cleric with a spell with the [Evil] descriptor in any domain spell, and lycanthropes*. Those creatures a paladin can kill without mercy and with no warning and have no social or alignment problems. And in purposes of detecting the big E evil the paladin's detect evil cannot be fooled by magic or any other means. What this allows is the character to still be faced with a moral decision about what to do with helpless, or surrendered foes, but it also allows the palaidn to be the "kick butt holy warrior of god" who can mete out divine justice with no question of the rightness or morality of his actions; which face it, is one of the reasons paladins are played.
* I also run two competing types of creatures - mechanically identical, but you have Lycanthrope (who are evil from the first change) and also have the ability to spread the curse; and changers, who have the same mechanics, but it is passed down in bloodline. The two groups are bascially at war with each other.
I play with cutlures. I ran a game where each race's default cutlure was one from earth - the Halflings were Celtic, the Elves were "fantasy asian" and the Dwarves were vikings (culturally - no boats), orcs being classic sacrificing generic aztec like. I also used some other classes tied to such races - the bard being a major halfling class, samurai, shukenja, monks and ninja being elvish, barbarian and such being dwarvish. That left the game with a very different flavor than most; and because the basics of the cultures were familiar to most eveyone, it dind't take a lot to explain such things to the players.