Recent game changes brought new ideas on this topic to mind. So here we go!
Appearance:
Artists can't seem to decide, at least in 3.5, what Shifters looked like. We ranged from mutton-chop lady (whom intrudes on half-orc territory anyway! ):
to furry natives:
None of which are very good.
4e made it a little better, although still falls short in the Monster Manual:
The actual 4e Shifter racial entry in PHB2, however, is the ideal shifter appearance IMO:
As far as appearance changes go while shifting, I personally feel that they are unnecessary. Maybe an animation change, though. Have normal attack and run animations be the same as humans, and while shifted, a more bestial approach, with growling and clawing and biting tossed into the attack chain (but not slowing weapon attacks down at all!). If that fails, go with the new animations the whole time.
Stats:
The basics are simple. +2 Dex, -2 Int, -2 Cha, +2 Balance, +2 Jump.
Shifting is where it gets tricky, but that's where I also have ideas. Set the initial Shifting up as a bonus feat, similar to HalfElves. It will be usable 1/rest, lasting for 6*(3+ConMod) seconds. Increase the uses to 2 at level 10, and there are enhancements to get more.
Longtooth- +2 Str, Regen 1hp/6s, and 20% of a Bite proc. The Bite deals 1d6+StrMod damage, and has a -5 penalty to hit in addition to your normal modifiers. Any items or abilities that add effects to your unarmed attacks also apply here. (Monks don't deal increased damage die.)
Razorclaw- +2 Str, +1 Dodge to AC, and 30% of a Claw proc. The Claw deals 1d4+1/2StrMod damage, and has a -2 penalty to hit in addition to your normal modifiers. Any items or abilities that add effects to your unarmed attacks also apply here. (Monks don't deal increased damage die.)
Dreamsight- +2 Wis, the effects of See Invisibility, and all your weapons have Ghost Touch.
Race specific feats:
Longtooth Elite- Your bite damage die increases to 1d8, it now counts as Magic and Silver for overcoming DR, and you deal one point of Con damage with each successful bite. The proc chance increases to 30%. Your Shifts now last 12 seconds longer.
Razorclaw Elite- Your claw attacks now count as Magic and Silver for overcoming DR, have the attack penalty removed, and have the proc chance increased to 40%. Your shifts now last 12 seconds longer.
Dreamsight Elite- While shifted, you now gain True Seeing, a +2 bonus to Spell Penetration, and immunity to mind-affecting spells and abilities. Your shifts now last 12 seconds longer.
Extra Shifter Trait- Pick one of Longtooth, Razorclaw, or Dreamsight, that you do not already have. You now gain those effects as well as your original while Shifting, and you qualify for the Elite feat. You can only take this once.
Enhancements will need:
Extra Shifting, Extended Shifting (the 12s length increase from the feats should be included with the base before multiplying the Extend on it)
Shifter Rage- requires Rage, this will give you a button that makes you Shift and Rage simultaneously, use up one of each, but last the entirety of whichever is longer, your shift duration or your rage duration.
Numbers probably need some tweaking, and they should probably get up to Toughness 3. I just had to get this idea out.
I feel like I couldn't put it into words properly, but I hope I got the point across.