Good questions, Trodax.
From the player's perspective at character creation, the Primeval Thule setting runs your game system of choice right out of the book...mostly. You can still be an elf. You can still be a wizard or a cleric.
Where Thule differs from an everything-but-the-kitchen-sink setting is how the world feels once you're out and about. Let's use player race as an example.
There are elves and dwarves in the world, sure, but it's not a cosmopolitan culture. You won't walk into a town to find that the blacksmith is a dwarf and the tailor is an elf. The elves live in decadent city-states (not unlike Melnibone, for the sake of comparison). The dwarves have walled themselves off from everyone else, emerging only to sell the strange metals only they can smelt and alloy.
I expect that PC elves and dwarves will exist as they always have, but they won't meet other other elves and dwarves unless they specifically go to their homelands. Just as Elric rarely saw other Melniboneans on his travels and Conan rarely saw other Cimmerians, those PCs are going to stand apart. The tavern falls silent when they walk in the door—and those players probably wouldn't want it any other way.
So the overall thrust of our answers is: we're staying true to the "feel" of a swords-and-sorcery world, but players are going to stand apart in that world. And frankly, we wouldn't want it any other way. Some aspects are going to be rare in the world, but not necessarily rare at your table.
We're going to do a series of blog posts in the next couple of weeks that talk about races in the world, arcane magic, divine magic, and a bunch of other topics. (There are only three of us and we're trying to pace ourselves.) We'll post them all at sasquatchgamestudio.com.
--Dave.
@davidnoonan on Twitter