I stand by my earlier objection to including a halfling race, but I don't understand the idea of, "halflings violate the Princess Rule, so they're not allowed". I don't see why they couldn't be darkened up a bit, much as the elves were.
I think that this "rule" is probably viewed more as a guideline. I mean, otherwise we could find plenty of violations in the game. Penguins, horsies, Guybrush "I want to be a mighty pirate" Threepwood (part of me would die if he was taken out), and, um... the Svaltalfar. Um, for the goth princesses.
Anyway, I think a retooled version of "halflings" (but why even call them that? It's a stupid, human-centric name. Why would they refer to themselves in terms of their size compared to other humanoids?) would probably work as a modmod if skillfully written, but I just don't see the point of cramming them into the base game.