You want to be on the side that your friends are, if you’re going to hang out with them. Horde and Alliance can’t group together, can’t talk in-game (the words come out garbled), can’t trade gear or money except through selling gear in the neutral (goblin town) auction houses.
I know about Horde, so here’s a breakdown of their races:
Blood Elf: Only accessible if you buy the Burning Crusade (first) expansion. Skinny character models, extremely metrosexual men, all very self-absorbed. Bad history (their leaders were following whatever would get them power, and they have a tendency toward magic addiction) but getting better. Only current option for a Horde paladin.
Tauren: Large character, which can be annoying to see around/get through short doors. Have cow-like heads and broad-shouldered bodies. Modeled heavily on Plains Native Americans, semi-nomadic people that settled down, deep connection with Nature (only current option for Horde druids) and hunting. Pretty gentle for a hunter race, not warlike or cruel - good history for them.
Forsaken (Undead): Used to be part of the mindless undead hordes ravaging the countryside until their queen, Sylvanas, regained her autonomy and freed many people. Kind of gross, rotting. Human-sized - all player character Forsaken are former humans (and nearly all non-player character Forsaken too, with Sylvanas a notable exception). Tend to have more worrisome quest lines, sometimes involving poisonings. Have a rather justified paranoia about outsiders, considering that many think they’re abominations.
Trolls: Their relatives are cannibalistic and fairly primitive. The group of trolls in the Horde swore off the old ways and are pretty mellow, but strong defenders of the Horde. Modeled vaguely around some Caribbean peoples. Taller than all races except (IIRC) for the Tauren.
Orcs: The “common” race of the Horde - all Horde speak Orcish (and all Alliance speak Common) and their other language, if a race other than troll. They used to be marauders fueled by a curse of demon blood, inflicted on them by foolish, power-seeking leaders, but they were cleansed of that. Their leader, Thrall, is noble and well-respected generally, but that’s not always true of his commanders. IIRC, a bit shorter than humans/Forsaken, but more stocky.
With the third expansion (Cataclysm) later this year, the Horde will get goblins as a playable race. Goblins will be the “shorties” of the Horde; the Alliance already have them with gnomes. Goblins are merchants, and interested in making mechanical gadgets that blow up (intentionally or not).
jsgoddess, he’s talking about what’s called a “rested XP bonus,” which is I think 5 or 10%. You get XP faster at your next session if you log out for the night in an inn (if in a small village) or anywhere in a capital city. It doesn’t last very long, but the longer you’re logged out, the more “rested bonus” time you build up. If you log out while sitting out in some pond or something, you don’t accumulate a bonus, I think.