Even more than the halflings, the gnomes have struggled to find a place in fantasy gaming. Big noses, illusions, inventions that fail disastrously, and talking to moles might make for good cartoon gags, but they don't exactly make for great heroes. Gnomes have never done anything that halflings or dwarves don't do better – at least nothing useful.
Until Pathfinder, that is. Gnomes are no longer annoying because they are pointless. Gnomes are annoying because that is how they stay alive and vibrant. A gnome that does not seek out new, exciting adventures can fall pray to bleaching. The Bleaching literally strips their color away and, eventually, their life. Gnomes have to regularly overturn their lives, and the lives of everyone around them, or they will slowly fade away.
The gnomes come from the fey First World. Were they migrants to Golarion? Escapees? Deportees? They don't remember and the fey aren't talking. Whatever their reason for leaving, the trip was one way. The gnomes are not a natural part of Golarion, but they are now a permanent part of it. Their otherworldly origin is an important part of their character. Gnomes make every attempt to fit in on Golarion, but they don't quite understand how mortal life works or how the races think.
All of the non-human player character races are literary descendant of fairies, or closely equivalent beings, from various European mythologies. Golarion gnomes gain some individuality and differentiate themselves from halflings and dwarves by reinstating this fey connection. Gnomes have always been more magical than the other two short races. This book gives a good explanation for that magic and gives the gnomes verisimilitude they haven't had before.
With the fey connection and the threat of bleaching, gnomes actually make sense as magic using practical jokers. Their high charisma helps them avoid some of the backlash they might otherwise receive for their behavior. More importantly, gnomish practical jokes are explicitly non-malicious. A gnome might play a practical joke on a paladin to bring his ego back down to earth, but he wouldn't do it out of cruelty. Annoying in a fun way – that's what the Gnomes of Golarion offers, as opposed to the annoying in an annoying way gnomes I've run into before at the gaming table.
If the book has any weakness, it's the sample characters. Upon reflection, I can see how they are whimsical and perfectly gnomish. The written descriptions, however, leave them seeming mostly... odd. One character gives away a magical copper coin away and then tracks it down and retrieves it by any means necessary. The other is Don Quixote-style knight who wears a tea kettle as a helmet and runs a constant monologue as he battles. They should seem a lot more silly and non-human than they do. They come off more as bad play actors than actual fey-touched gnomes.
But the sample characters are a small quibble. If you play gnomes, or wonder why anyone would play one, this is the book for you. No matter your game world, it will be a lot more colorful and interesting with these gnomes in it.
I create my own gameworlds, so I haven't subscribed to the full Pathfinder Companion series. I did, however, pick up all the race books, since I figured those could easily port to any setting, and I have not been disappointed.
Halflings started off as hobbits with the serial numbers partially rubbed off and they have struggled to break out of that mold ever since. There have been many attempts over the years to do just that, but this book is one of the better ones. Golarion halflings are no longer the secluded, isolationist country folk of early 20th century England. They are ubiquitous and, in many ways, are the backbone of human society. Humans get the credit and the glory, but very often the actual work was done by halflings standing in the shadows.
The book is set in the Pathfinder setting of Golarion and assumes knowledge of the setting. This doesn't detract from the usefulness of the book. Halflings are slaves in the obviously lawful evil empire and freedom fighters in the good nations. I found very little information that I couldn't puzzle out with a little effort.
The crunch of the book is as good as the fluff. Of particular interest is the Jinx section. Most halflings are born lucky – and, in a southern desert nation, their main job is being a good luck charm for caravans. A few halflings, the jinxes, are born without that luck – and they can inflict their lack of luck on others. This ability is perfect for the halflings that still live in slavery. They can hinder their masters at every turn and remain undetected. If you have the Advanced Player's Handbook, jinxes also make the perfect witches.
My only complaint about the book is that it doesn't go far enough to separate halflings from their decades of baggage. I think the characterization of the halflings that are still enslaved is fine. Their small stature does make them vulnerable and it is plausible that the evil empire could stomp out any real magic use. But free halflings have no such hindrances. Halflings might not match the martial prowess of the larger races, but a fireball is a fireball. Why wouldn't a free halfling want to enforce his continued freedom himself with magic? Alchemy is an even better fit, given the halfling predisposition to crafts. The free halflings might be content to stay in the shadows, but they shouldn't be willing to be pushed around any more.
While I wish the authors had pushed the envelop a little more and made the halflings even less like hobbits, this is a solid book filled with excellent ideas. Whether you GM, run halfling characters, or just like reading good gaming books, Halflings of Golarion is an excellent choice.