To amplify a little on TGR's post...
The game starts with 2 cities, Qeynos (good) and Freeport (evil). If you begin as an evil race, you will always start in Freeport. If you start as a good race, you will always start in Qeynos.
Qeynos is a happy, cheerful place run by Queen Antonica. The people are friendly and helpful. There are lot's of open spaces, trees, nature, and sunlight.
Freeport is an oppresive place run by the Overlord. Cities are like mazes and have giant intimidating walls meant to keep you oppressed. People are rash and rude, wanting your money, your servitude, or your life.
They are both effective in getting you through levels. Each side has hundreds of NPC's and quests, plus dozens of zones for you to adventure.
If you do not like your good or evil side and want to betray (for example, you're a Dark Elf in Freeport, but you want to betray and join Qeynos), you can do a Betrayal Quest. It is not for the faint of heart, and will take a focused effort - but it has been done by many. Once you betray, you can never go back.
Once you gain a few levels and venture out of the city zones, you will begin to meet adventurers from the "other" side. Eventually, good and evil players will be side-by-side fighting monsters.
When you pick a race, pick something you will enjoy. But consider...
I can't remember how many Erudite Mages I've seen. Another Barbarian fighter? /groan.
Any race can be any class, so you have the opportunity to mix it up. Consider a cute, pig-tailed female wood elf Necromancer that cackles wildy as her Zombie rips flesh from it's victim.
Or a Troll Palidan that has "seen the light". Gnome Monk? It can be done.
Above all, have fun. :)