One of the first, but occasionally overlooked decisions to make when creating a new character is what they'll be called. It is terribly important however, because your character's name is how many players will think of him. They might not remember all the little scars that you've painstakingly described or that your blue eyes have silver flecks in them, but that name will recall all the exploits and relationships the character had when invoked.
A few things to keep in mind when choosing a name are how common it was when you were born, how it'll be shortened for convenience, what the name means, and, especially if it's foreign or made up, if it looks like any other words that could be potentially embarassing. For example, I once spotted someone whose name was one letter off from a type of frottage. I thought it was hilarious, but she didn't seem to. Your name might feature in how you developed during early childhood and how your identity was formed too depending on its characteristics. Keep in mind that your character has to have lived with whatever name you've given him.
Normally this is dismissed by a lot of games as being aesthetic only and having no bearing on gameplay, but such isn't the case here, especially initially. Not only does this determine whether you can choose slayer as starting class, but the sex of your character will factor into basically every interaction you have in the game. Likewise, your character's entire childhood is going to be frought with different challenges, experiences, and expectations from his parents, peers, and community. As one of the few things that you're unable to change or otherwise work around once your character is created, you should think relatively long and hard about those two options, male or female.
Your four basic options when choosing a race are human, vampire, half demon, and demon. Each have different advantages and disadvantages regarding job availability and customization. Some classes are only available in chargen to certain races. These can later be altered with change points however.
Humans are an easy and simple choice for players that don't want to be too burdened by playing something too much biologically than themselves or want to worry about creating lore or potential canon issues sprouting up. They the best job selection, can buy firearms freely, and won't have to worry about the expectancy code under normal conditions. All humans have souls regardless if they're evil or not. The only exception to this is if a vampire uses a change point to turn human. They won't regain their soul in that case.
Vampires are another good choice for new players because a lot of the lore is already fleshed out. All vampires are evil and soulless as defined by the code. What this essentially means is that as a vampire, you won't be able to gain experience from killing demons and the lack of a soul will prevent you from ever being able to. Vampires can pass as humans in many instances, but have a slightly more restricted job selection. When shifted into their vampiric appearance, they get a small bonus to both speed and strength and are able to use a racial slay ability, bite, that has a higher success chance than a normal slay.
There are substantial and hotly debated canon issues that need to be taken into consideration when creating a vampire as well. Make sure to read up on what vampires are like in the Buffyverse and though some deviation can be attributed to individual differences between one vampire and the next, you shouldn't imply that every vampire is similar to you and contradict canon.
Demon is an umbrella term used in Buffy to refer to all most every sentient being that isn't human or animal. There are some exceptions, but if you want to create a character which isn't a human or a vampire, they'll most likely be considered a demon. There are a number of demons with varying amounts of lore already written for them in Buffy, but the theme was left very open to include a number of mythical creatures. Demons represent a lot of creative freedom, but also responsibility.
As society is built around humans who are mostly ignorant to the existence of demons, job selection is very limited and the expectancy code is harshest on them. Depending on how many demonic features you've added to your character in the form of demon buffs, you'll find it increasingly difficult to go into public areas without being jumped. There are some ways to mitigate the inconvenience, but it will most likely always remain one. In exchange demons get access to three additional stats, demon offense, demon buffs, and demon mystics, all with their own special abilities and features. A special type of demon buff called a mortality is only available to demons.
Choosing good during chargen will make your demon souled and choosing evil will make them soulless. In order to be an evil, souled demon, you need first create a good demon and then slaughter good aligned mobs until you've turned evil.
Half demons are a compromise between humans and demons. These are characters which have two forms, both a demon and human one. They can switch between them practically whenever they want and it allows them to blend well into society and gain many of the benefits humans enjoy such as the job selection and ability to purchase firearms.
Though they get access to the same three new stats that demons do. Half demons need to be in their demonic form to take advantage of any of their demon buffs. This can cause half demons who are caught off guard to be unable to enjoy certain protections that normal demons benefit from all the time. Demon offense, however, can be used regardless of form. In that way, half demons are often ideal for characters who seem otherwise completely human aside from their powers.