I've played a few games as drakes against elves today and have come to the conclusion that elves are the best race, while drakes are the worst. 
Seriously, some things to consider:
Elves:
Almost every unit has a ranged attack
Very good defense in most terrain, and especially forest.
A scout unit that moves 9 spaces (fastest in the game?) and can go through forest with no movement penalty.
Woses which are a mega-powerful melee unit and also capable of ambush an regeneration. (Granted, they are slow and weak to fire and have no ranged attack, but it seems odd to stick such a powerful melee unit in with the same race that has the best archers.)
Mermen, a very powerful melee unit for water.
Druids, capable of both slowing enemies and healing comrades.
...
Do they have any downsides?
They aren't the strongest melee fighters, but that's about it.
Drakes:
Most units have a very powerful ranged attack.
Many units that can fly over all terrain at no penalty.
A melee unit that has the choice of a blade or pierce attack.
A mage that not only has a magical cold attack but also a fire breath attack and a mediocre melee attack.
...
Their downsides?
Extremely poor defense, with the highest bonus possible being 40% for most units.
Their units cost a large amount, almost double that of most other races.
The few regular-priced units they have lack any ranged attacks and have only average melee abilities.
The mages can strangely not fly over water, tundra, or swamp, despite being able to fly over everything else.
How do the two compare in combat?
For starters, something that I found incredibly annoying was that to be equal in defense with an elf I had to be in my most prefered terrain (hills & mountains) while the elf had to be in one of his least prefered (grasslands) this puts us both at 40% defense. If the elf moved onto the hills (which is supposedly the drake's prefered terrain) he actually has a higher defense value than me at 50%
Extremely frustrating.
But, you say, you can fly! you can out manouvere the elves and force them to play by your rules! This is true in mountains but, again, the elves actually have a higher defense than you do in mountains and hills so it becomes preferable to "hold the line" at the edge of the mountains rather than leading them around and engaging them at will, as you would think you should do.
But what about water, you say? Yes, I thought this would be the ideal scenario. Being able to fly out into the ocean for sanctuary or to outflank the opponent. Only... they have mermen. Fighting mermen in the water is almost as bad - perhaps even worse - than fighting elves in the forest. They do massive amounts of piercing damage (which drakes are susceptable to) and have 70%/60% defense bonus for shallow and deep water respectively, while drakes get a whoping 20% and 10%
And, again, I remind you that the elvish scout units can move at 9 squares (and have no penalties in forest) while the petite drakes can only move 7.
So, to recap: Despite being able to fly, the drakes can only out-manouver elves in mountains and water. Yet, even in those 'prefered' terrain types, they are still at a disadvantage to the elves in terms of defense even though those are supposed to be the least prefered terrain of the elves.
What I think should be different about these two races?
Elves:
Reduce the speed of the scout to 7
Lower their defense in hills to 30% and in mountains to 20% (They've got to have some terrain that they're no good in._
Remove the merman and perhaps replace it with a flying unit.
Drakes:
Raise the defense in shallow/deep water to 30/20% and raise the defense in mountains to 60%
Increase the speed of the petite drake to 8 and the Drake Fighter to 6
Allow the the mage to fly over water and tundra like all the other flying units. (what's the point of out-manouvering the enemy when you have to leave your mages behind?)

Seriously, some things to consider:
Elves:
Almost every unit has a ranged attack
Very good defense in most terrain, and especially forest.
A scout unit that moves 9 spaces (fastest in the game?) and can go through forest with no movement penalty.
Woses which are a mega-powerful melee unit and also capable of ambush an regeneration. (Granted, they are slow and weak to fire and have no ranged attack, but it seems odd to stick such a powerful melee unit in with the same race that has the best archers.)
Mermen, a very powerful melee unit for water.
Druids, capable of both slowing enemies and healing comrades.
...
Do they have any downsides?
They aren't the strongest melee fighters, but that's about it.
Drakes:
Most units have a very powerful ranged attack.
Many units that can fly over all terrain at no penalty.
A melee unit that has the choice of a blade or pierce attack.
A mage that not only has a magical cold attack but also a fire breath attack and a mediocre melee attack.
...
Their downsides?
Extremely poor defense, with the highest bonus possible being 40% for most units.
Their units cost a large amount, almost double that of most other races.
The few regular-priced units they have lack any ranged attacks and have only average melee abilities.
The mages can strangely not fly over water, tundra, or swamp, despite being able to fly over everything else.
How do the two compare in combat?
For starters, something that I found incredibly annoying was that to be equal in defense with an elf I had to be in my most prefered terrain (hills & mountains) while the elf had to be in one of his least prefered (grasslands) this puts us both at 40% defense. If the elf moved onto the hills (which is supposedly the drake's prefered terrain) he actually has a higher defense value than me at 50%
Extremely frustrating.
But, you say, you can fly! you can out manouvere the elves and force them to play by your rules! This is true in mountains but, again, the elves actually have a higher defense than you do in mountains and hills so it becomes preferable to "hold the line" at the edge of the mountains rather than leading them around and engaging them at will, as you would think you should do.
But what about water, you say? Yes, I thought this would be the ideal scenario. Being able to fly out into the ocean for sanctuary or to outflank the opponent. Only... they have mermen. Fighting mermen in the water is almost as bad - perhaps even worse - than fighting elves in the forest. They do massive amounts of piercing damage (which drakes are susceptable to) and have 70%/60% defense bonus for shallow and deep water respectively, while drakes get a whoping 20% and 10%
And, again, I remind you that the elvish scout units can move at 9 squares (and have no penalties in forest) while the petite drakes can only move 7.
So, to recap: Despite being able to fly, the drakes can only out-manouver elves in mountains and water. Yet, even in those 'prefered' terrain types, they are still at a disadvantage to the elves in terms of defense even though those are supposed to be the least prefered terrain of the elves.
What I think should be different about these two races?
Elves:
Reduce the speed of the scout to 7
Lower their defense in hills to 30% and in mountains to 20% (They've got to have some terrain that they're no good in._
Remove the merman and perhaps replace it with a flying unit.
Drakes:
Raise the defense in shallow/deep water to 30/20% and raise the defense in mountains to 60%
Increase the speed of the petite drake to 8 and the Drake Fighter to 6
Allow the the mage to fly over water and tundra like all the other flying units. (what's the point of out-manouvering the enemy when you have to leave your mages behind?)
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