One of the things I like about Frostgrave is the way you can recruit a varied warband! You can embrace the fantasy stereotypes: Humans make good thugs, of course, but which wizard would not want a fleet footed bow-armed Elf as a Tracker? Or an armoured Dwarf with a double handed axe as a Templar? And who would chose anything other than a halfling as a thief? It makes no difference to the game, but if it fits your narrative/figures you have to hand, why not?
I have played 1st ed and have recently acquired 2nd edition, and I would go for 2nd if the budget allows.