I regret making a halfling because of their food consumption rate. Damn hobbits and their second breakfasts.
Dwarf has the best starting stats, not many drawbacks other than kind of low charisma which has limited value. Half-elf provides the best options for religions (Karana for jaggedpine quests and easiest to acquire cultural armor, Tunare for Nature's Defender, Mith Marr for... coolness?), but has low starting stats ("well rounded," but not really ideal for Paladins). Halflings shouldn't even be an option. Whoever added them as a hybrid option had a weird sense of humor.
you want a tunare paladin for nature's defender quest. also CHA makes a big difference here with paci
Half elf. Best base charisma for lull rolls and eventually Divine Intervention rolls. If you're raiding you'll cap your Stamina regardless of race choice at this point. Come Luclin and PoP, innate stats are even less of a concern. No paladin race has any racial benefit really worth noting. Unless you want to claim Halflings 5% faster exp is a huge benefit.
Ya, what Darch said. None of the paladin-playable races have hot bonuses like innate regen or frontal stun immunity. So I'd probably just pick the one I thought looked badassest (gnome) or funniest (gnome) or feistiest (gnome) or panachiest (gnome) or uberest (gnome).
I won't be doing raid content, only group content. Does that mean a dwarf stats will benefit me more. Also I won't have natures defender unless I can MQ it. Don't all these weapons get replaced in luclin any ways? Will probably take me a year to hit 60 with my playtime lol.
Dwarf starting stats will be of better benefit while you're starting out, but their benefit does depreciate as your gear gets better. It's pretty tough to replace Nature's Defender in Luclin group content, to be honest. There's Dathor Great Hammer and some kinda-sorta groupable content in CT that drops roughly the same damage/delay as ND, but the rest of the stats don't really compare. That being said, I think a weapon isn't really the primary concern for a paladin. 1h+shield is preferable to 2h, in my opinion, and the rest of the gear is more important than the weapon. If your focus is on group content, I would probably say Half Elf Karana or Dwarf. Easier to gear in the long term with Thunderous Heraldic or Imbued Dwarven. I think Crown of the Tempest Guard might be slightly out of reach if you are strict on group content only, but that's a toss up really. You can probably get the PoFear part MQed easily, but the clicky doesn't stack with 8th Coldain ring.
Also note that only two weapons have to look that ND does - the only other being the Sword of the Shissar from Emp. It's a great weapon that is easy to obtain, so if you are really hung up on race and looking for something to push you in one single direction - well, Nature's Defender might be it. And yeah, in that respect it is really hard to beat the Half Elves out there. Though if you go high elf you can actually make yourself the high AC luclin crafted armors. Half elves need high elves to make it for them.
I have a dwarf paladin following brell. The cultural crafted set has served me well all the way through 60. Solid AC and decent stats on the majority of the pieces. I wouldn't worry about paladin dps to much since we use flash to keep the mob in place and beating on us. Dwarven Plate Boots - Dwarven Plate Bracer - Dwarven Plate Breastplate - Dwarven Plate Collar - Dwarven Plate Girdle - Dwarven Plate Gauntlets - Dwarven Plate Helm - Dwarven Plate Pauldrons - Dwarven Plate Vambraces
Gnome choice best choice. I've written here before that Shadowknights have racial options where they can optimize for their role--Ogre for stun immunity or Iksar for the additional AC--but Paladins don't have this curse. Paladins are free to play whatever race looks the best, without fear of regret.