None of the above, at least for flavor text. The mechanics are ok I suppose, but we don't use substitution levels anyway. 
The above is much much more fitting with our groups view of elves (and the other 2e complete race books rock too) than anything in the new 'Races of' books. So while we play 3e ... we still use the 2e supplements for 'da flavor' as they present stuff in a much more colorful way (at least as long as you stay away from the 2e FR elven stuff - like Evermeet and C: EoE.)

The Complete Book of Elves said:In the not too distant past, a dwarf bounty hunter made a terrible mistake. While pursuing a fleeing half-elf foe, he came upon an elf hamlet. He wrongly assumed it to be the home of the half-elf culprit. Nothing would satisfy him that this was not the case, and he grew ever more enraged that the elves were "hiding" his rightful prey from him.
In the dwarf's anger and his lust for the reward money, he cruelly slew a woodsman—using the elf's own axe to cleave the widower in two. The elf's four children, who had been playing nearby, froze in fear. Ignoring the grief-stricken children, the ruthless dwarf turned once more to the woods. There he found old tracks made by the fleeing half-elf, and the dwarf set off after his foe again.
Elves being elves, the children were taken in and nurtured as best the hamlet could. Most were eventually fostered away to other villages, for the hamlet couldn't support children whose provider had passed on. Despite being separated, the four children nursed a private longing for vengeance in their hearts. Each trained diligently to understand the ways of the forest and of tracking, learning its subtle nuances that they might avenge their father.
Fifty years passed after the death of their father before the young elves deemed they were ready. They reunited and swore a solemn oath not to rest until they found the slayer of their father. The four then split off, each heading in a direction of the compass. Burned in their minds was the image of the dwarf. They questioned all they came across, and some sought certain magical items. Finally, one of them found a lead and left word for her siblings to follow as soon as possible.
The old dwarf had retired from bounty hunting to live alone in the mountains. The four elves swooped into his house and stole him from his doze by the fire. None ever saw the dwarf again, but his house still stands. Hacked limbs are left on the doorstep every few years—the hacked limbs of an old dwarf. To date, there have been 17 arms and 12 legs.
A ring of regeneration can work wonders in vengeance.
The above is much much more fitting with our groups view of elves (and the other 2e complete race books rock too) than anything in the new 'Races of' books. So while we play 3e ... we still use the 2e supplements for 'da flavor' as they present stuff in a much more colorful way (at least as long as you stay away from the 2e FR elven stuff - like Evermeet and C: EoE.)