A thought struck me.
To be entirely honest, it struck sometime last week, but this is the first time I've really put any thought into it. That is, the thought of ditching or changing entirely the demihumans. See, it came about when I was explaining to one of my players that he doesn't have to be an "Elf" if he doesn't want to. He can take the class and be a half-dragon dude, or a humanoid rhinocerous or whatever it is he likes. He eventually decided to play up the elfiness of it all (not the least of which was because he fully expected the elf to die before the night was over), but the short conversation in my head left reverberating echoes in my noggin.
See, I've never really liked other fantasy races, at least not in D&D and other games where I'm the one having to make up the entire world. They're either played for laughs, or they're basically skinny/short/beautiful/ugly/hairy/goofy humans who live in places where humans normally don't. There's no real sense of alien-ness to them, which I think is a huge part of life.
To use a real-life example, I was watching a show about some african tribesmen where the women paint themselves red and have all these interesting beliefs and omens and tribal shamans and whatnot. It was absolutely fascinating, but their worldview was entirely alien. I mean, I'm a middle-class college student in a fairly secular society, and they're all hunters and farmers living in a world of spiritual contact with spirits or whatever it is they believe. If me and them had a talk on the streets (assuming we could speak the same language) I'm not sure we'd get anywhere at all.
And so it would be with elves, dwarves, and halflings, at least. Their world-view, their ideas, their senses of duty and self preservation and everything about them would be different, if for no other reason than that they live in relative isolation, with their own languages and cultures and, hell, lifespans.
So I think that, next time I run Labyrinth Lord, I'll have the elf turned into a human Spell-Sword, the dwarf into a Dungeoneer, and the Halfling into, I dunno, a Scout, with their bonus to armor class explained away as quickness and their inability to use big weapons as a fighting style. Or something.
This way, there can still be dwarves, elves, and halflings, just like there are still ogres, orcs, demons, and kobolds, but they're potential enemies and roadblocks instead of Grumpy McBeardybeard, greedy, stout, and loyal face-hammerer.
I think any other treatment is unfair to the source material that the demi-humans come from.