Gnome
Just because gnomes are great!
If gnomes could be every class i would have no other races
Pick the character for what you like looking at, if you wanna min/max gnome is best (even in pvp). Nothing comes close to beating having another 5-6k mana at the start of the battle.
And before people flame me for saying gnome is better in pvp you have to remember that resi is a really good stat right now. Escape artist is also a really cool ability (war root says hello)...
It's because LoS is calculated from the center of your character. Goblins have the same issue. If you're a gnome trying to heal someone at the top of a set of stairs, the line from the center of your character has to be able to connect to the center of his character, meaning you have to run farther up the stairs than a taller character would.
On the subject "Go with this because the other one is fugly" I must say, seriusly think about it.
I went with goblin for the racials, ended up having a bag dedicated only to noggenfogger and quitly looking with green eyes on the female belfs :P
There is no racial in the game that makes taking a race you think look worse worth it, not even Every man for himself in PvP, you often end up wanting that rasilience and going for some crappy resi/sp trinket anyway.