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Thank goodness you can't name yourself "Legolas."
The Elves of Middle-Earth are the most ancient race in the land, having been created long before the others were sired. They do not die, unless they are felled in battle. They don't sleep either, instead entering a dream-like trance to rest themselves. Some are known for their stewardship of nature or their maintenance of grand halls, but all Elves love song, dance and poetry.
Many Elves have a special bond with nature, and are able to speak with the spirits of the trees and the animals. Most of the Elves of Middle-Earth are in the process of leaving the continent for the west, with the knowledge that their time has come to an end, and that their role is to step aside to allow the races of Men to take their place as rightful rulers. The Elves that players control have presumably decided to take a more active role in the world, honoring past alliances and standing against the evils of Angmar and Mordor.
Elven players can choose to be hunters, champions, guardians, lore-masters and minstrels. They can start in either Edhelion or Ered Luin.
Elves share a particular rivalry for Goblins and Orcs, as both races were created by the dark lord Morgoth in ancient history as perversions of Elves - they are their polar opposites, as vicious and cruel as the Elves are noble and kind. As such, Elves have access to special traits from killing a certain number of Goblins, Orcs and Drakes that give them a leg up over other races. The primary abilities that they get from achieving these racial deeds are a minor stealth ability - mostly useful PvMP - 2% bonus to bow damage, +20 fate, a +75% chance to parry for 10 seconds buff, a +2% to one handed swords bonus, and a +2% increase to total fellowship power buff.
Elves also receive +15 to agility, -8 to fate, -20 morale, -1.0 to out of combat morale regeneration and +1% to disease and poison resistance. These abilities altogether make Elves a particularly attractive choice for hunters. No other race gets as large a bonus to agility, and their stealth ability is especially useful for hunters who like to ambush creeps. The 75% chance to parry buff and the one handed sword damage bonus also makes guardian an attractive ability, as the -20 morale is only a minor setback.
Their agility bonus is also good for champions, as that increases their critical hit chance significantly.
A guide to some of the playable characters in Lord of the Rings Online.