It's a good point that the faction system from EQ managed this nicely, but what about knowing how each race perceives each other up front? It'd allow you to roleplay encounters between members of certain races before you either visited their lands (and skirmished with their guards :twisted: ) or have to resort to getting the information from a spoiler site... I'm not aware of any MMO that has presented this information in anything other than the broadest of terms.
While as an individual your character may not yet have encountered many races outside their own at the point where you start playing, they must be at least peripherally aware of the existance of other races and their own races stereotypes for them:
Looking down at the nubile Kurashasa adventurer seated beside him, Lightning, the famous warrior, decided to impart some advice. "Don't trust those dwarves", he cautioned, "cowards and backstabbers the lot of 'em! Why I remember once one of them accused me of theft! Me! I had to kill hundreds of them before they'd leave me alone!"
