First off, I really enjoy when the game recognises your race and NPCs react to it.
When that's not the case, it gets pretty funny though, like here.

Quest: The lost symbol (Isobel's companion quest)
Step: Search for Kiv Lindres in Seyda Neen
Location: Stros M'kai
I'm talking to the navigator, Davak Hlaren, to get passage over to Seyda Neen.

I'm playing a Dark Elf, and this is what my fellow Dark Elf has to say to me:



I think I'll be fine, thanks for the concern.

It's a small thing, but it'd be great to have more NPCs recognise who/what we are again to prevent this kind of situation.