We're had some pretty good discussions about experience points in D&D and it's offspring the last few days, so I figured why not keep a good them going ;)
Level caps for demi-humans is pretty common in the earlier editions of D&D. Halflings capping at 4th level is always the thing that comes to mind for me as well as the work around of giving thieves unlimited advancement in AD&D.
In truth, level caps haven't been an issue in my gaming, mostly because few of my campaigns, as a player of a DM have ever reached the level where they would come into play.
From my perspective, I'd rather give a racial XP penalty (depending on the strength of the races default abilities) than hit them with a hard cap. It comes closer to accomplishing the balance that level caps supposedly are there for than the caps themselves.
So, where do you stand? Hard caps, soft caps or no caps at all?