In my homebrew, elves and dwarves are the only playable demihuman races. But I've modified them to make them more rare, mysterious, and powerful. They have ECLs. Half-elves exist, in some places, but they're extremely rare. The ruling dynasty of the West Kingdom does have elvish blood, and I've introduced an Elvish Blood feat that is available to PCs. There's a similar Fey Blood feat.
There are gnomes, too, but they're only one foot tall and have no interest in technology. More like David the Gnome.
There are no orcs IMC and thus no halfbreeds, either. Halflings have also been eliminated.
On the other hand, I have five distinct ethnic groups of humans (divided into many more nations, kingdoms, and tribes) to keep things interesting.