It is interesting to see how people discuss how a fictional race should look correctly. I am not an expert for DnD or Tolkien and I just read a few wikipedia articles, but here is my opinion:
I see 3 possible origins for elfs: - medieval norse mythology: Elfs are small creatures and they are often evil. So they are shown as source of nightmares and illnesses. There is no clear distinction to other small creatures such as dwarves, gnomes or kobolds. - They are related to sylvan creatures such as nymphs who lived long enough in the material world and had contact to other civilized races so they became civilized people as well. They have a close relation to nature and they look some kind of alien. - They look like slim humans with slightly different ears and eyes. Like the DnD 1E picture shown before.
Personally I prefer the second option, the more sylvan look. In a computer game I think different races should be distinclive. You look at somebody and you can tell right away that this is a human, dwarf or elf. So I agree when somebody says: "It is a problem when elfs look too much like humans with pointy ears." In that sense, I like the look of the elfs in DOS2. We can discuss how alien they should be so that other races in the world (especially humans) definitely consider them people and not monsters.
Prof. Dr. Dr. Mad S. Tist
World leading expert of artificial stupidity. Because there are too many people who work on artificial intelligence already
Prof. Dr. Dr. Mad S. Tist 
