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It seems to me that Halflings are fairly useless as written (oh, they're such nice people -- except for the odd one who becomes an adventurer). I was thinking of a few minor changes to make them a bit more ... interesting.
A Bit of Background
These Halflings live on Yrth, in Western Ytarria in the Land of the Djinns beyond the Fence of God Mountains. When the Banestorm brought them through, they were enslaved by the djinns (in my campaign, a role taken by the Bales). Some managed to escape the slave pits and blood farms, those with some resistance to magic. Natural selection and a harsh new life has altered this race slightly.
The same racial package from Fantasy Folk can be used, with a few minor alterations. Just remove the Reputation and Code of Honor, and Replace them with Magic Resistance +2 (4 pts), High Pain Threshold (10 pts), Bad Temper (-10 pts), Code of Honor - Warrior's Code (-10 pts), Intolerance/Mages (-5 pts), Savoir Faire/Western Halflings at IQ (1 pt), Brawling at DX+1 (2 pts), Shortsword Sport at DX (2 pts), Tournament Law/Dueling Code at IQ (2 pts) and Chauvinistic (-1 pt). Revised racial cost is 1 points.
Western Halflings are a rowdy, robust folk with a love of life. They hold great feasts with much merriment and music; feasts that quickly degenerate into either a drunken brawl or a degenerate orgy, depending on the general mood. They distrust outsiders; a western Halfling considers clan first, tribe second, the Halfling race third, and others seldom.
Western Halflings are redoubtable warriors. They are expert cavalrymen on their small ponies, but the elite of their military are the Charioteers. These are usually pulled by huge horses, and carry a crew of two halflings, with spears and bows. The spearmen and archers on these chariots are experts at their weapons, specializing in pinpoint accuracy during a swift pass. Some chariots have pump-action flamethrowers (for dealing with a necromancer's undead legions). Charioteers have the same status in Western Halfling society that knights have in human societies.
Western Halflings are almost pure carnivore. Their feast will have little plant matter, and true warriors will wash their food down with fresh blood instead of water or wine.
Western Halflings mature far more quickly than their more sedate kinsman; a Western Halfling is considered an adult at 20. The exact age they begin aging is a mystery, since none have lived past 50 in their recorded history. Western Halflings have as many mates as they can afford (males die quickly, so there is no shortage of females).
Western Halflings are nomads, wandering from place to place, eternally squabbling one tribe with another, uniting only to fight the hated djinns (who incidentally still have halfling slaves, bred down into presentient domestic animals). Leadership is an elected position; the warriors select the most cunning to lead them. Only those who have made their desire for leadership known are exempt from the choosing.
Western Halflings are very protective of their females; few outsiders (and no non-halflings) will even see a female Western Halfling, and anyone who actually draws blood from a female is put to death on the spot.
All Western halflings follow the Code of the Duel to settle differences; a ritualized combat with an involved scoring system (necessary skills are part of the racial template). This duel requires two witnesses, and replaces a court system for minor matters.
Being a warrior society, and having a natural talent for projectiles, all Western Halfling have a ranged weapon skill. Popular among females are darts, slings, and shuriken (they use a different name). Males prefer spears (usually with thrower), small crossbows, and compound bows.