First off, a disclaimer: these ideas are not my own. I adapted them from concepts found in Michael McRae's chapter on "Race Creation" in The Complete Guide to Writing Fantasy. Now of course, in typical Seer fashion, I've tweaked and modified them a bit. Helps with copyright issues
McRae's approach consists of six steps and, if you look closely at it, is essentially a very simplistic fractalling system. In fact, my own Race Fractalling System (which is currently in the works) owes much of it's inspiration to McRae's steps. But since I don't want to give yall too much spoiler, I'll try to restrain my commentary 
So without further ado, here we go!- Theme Embodiment - This step is the one that gives this system its genius (in my opinion), but in spite of that it's also the step which most writers seem to either overlook or work through unconsciously. McRae best summarizes this step as asking, "What types of society do I want to introduce to my world?" His suggestion is that in this steps you look at the themes you plan to have in your book, and then have each race you create embody one of those major themes. I tend to disagree slightly in this one, being a worldbuilder for worldbuilding's sake. I think you can craft a race even before a story idea comes, but I'll cede that it's a bit of a moot point for discussion. I will say this though, if you get nothing else from this thread take this: Consider what (theme/concept/essence/etc.) you want each race to convey.
- Interactions - As McRae so adequately puts it, "In short, what do your racial groups represent in regards to one another? " Does one race hate another? Is there a race that is worshipped by the others? Does one race consider another divine? For instance, it would seem a bit odd if your One-with-Nature race were natural allies with your Mechanical-domination race. In other words, if the Ents had been allied with Saruman, it would have been a much different LotR.
He also says to look at whether your races can interbreed, if there are "half-races," the status of half-breeds in the world. - Major Non-Physical Characteristics - This step is why I call this system simplistic. This is the step where you develop the culture, political structure, economic structure, etc. of your races. McRae advocates this as the one of the most crucial areas for your development to flow out of the embodiment covered in step #1. Don't worry about going into too much detail during this step, that comes later. This is where you pick out the more important overall ideas for your races.
- Name - This is the step where lots of people start, and I think that's fine. However, the value of postponing the naming as McRae does is that now you're in a stronger position to assure the essence of the name chosen fits the race that you've already started building. In fact, the work you've done up to this point can help give you a better feel of what kinda name the race needs.
- Physical Description - *eyes soapbox and resists the urge to climb on it* I'll save that for another day. *puts soapbox away* Anyways…pressing on. Much like names, many people make this one of their very first steps when creating races. For the most part, I say whatever works for you, works for you. But…I really like McRae's way of letting the physical description flow out of the overall essence that you've been shaping up to this point.
- Fill in the Fine Details - My favorite part McRae mentions two main ways of handling this step: either sit down and make notes of all the little details of your race beforehand, or figure the details out while you're writing the story. Both have pros and cons. His biggest warning about pre-writing developing is that you can wind up with lots of details not pertinent to your story and be tempted to throw them into the story anyways. On the other hand, there's the risk of inconsistency and the like for the develop-as-you go approach. For some the former will be the one that works for you, for others the latter.
Well! There you have it. Like I mentioned earlier, the real strength of this system to me is that it starts with determining the Essence you want your races to have. I know, he didn't word it that way.
A lot of people it seems start their race creation with a physical description or special ability that they want them to have and then slap a name on them and fill in some details as needed. I'm very guilty of this myself 
And again, if you can go about it that way and make it work, bully for you. However, approaching it in that manner runs the danger of making your races rather flat if one is not careful. *looks down and sees the soapbox under his feet* Oops! How did I get up here? 
*climbs down* Basically, summarize McRae's approach into one sentence without all the steps and suggestions: Take a theme/concept/essence and expand it into a race and save the appearance for next to last.