I've been neglecting Goblins, probably playing them less than 5% of the time. I've recently read recommendations for Goblins both for Fighter and Sorcerer. So I played my last couple of games as a Goblin, trying a couple of classes (including the two recommended).
I think that Goblins play differently than the other races because their conversion bonus neither gives a perma-bonus (Orc/Human/Elf/Dwarf) nor a spike (Halfling/Gnome); but rather it's kind of like a permanent bonus (you keep the XP you gain), but not really because at level 10 they are still weaker than the other races; and it's kind of like a spike beacuse of the full-restores, but again, not really, because you only gain 1 extra full-restore, the rest is just timed better. So it's primarily a speed/timing thing - the Goblin can better control the pace of advancement through converting.
It did *feel* good to play the Goblin. However I caught myself getting sloppy on popcorn management - why bother planning carefully, when I can just break a glyph and level, using the full-restore to spike a higher-level foe or boss in the process. I think part of the reason why playing Goblins feels so good is that there is a guaranteed bonus - since conversion timing is critical, throughout the game I'm looking for opportunities to convert, and get the maximum benefit from it (i.e. spike a 4-level higher monster). Whereas with a Gnome I can finish the level without quaffing any of the bonus potions, essentially getting no benefit from converting.
I tested a couple of Hard levels, but just to see how things pan out on a Vicious level I went through Naga City with the Goblin Sorcerer of Mystera. It felt like a breeze; I lucked into the Crystal Ball, so I had massive mana spike and I won the level easily. Then I tried, as a reference, the same level with the Gnome Sorcerer of Mystera, and I won similarly easily. Actually it did not *feel* as easy, nevertheless, objectively, it was easier despite not feeling so, because I had more resources left in the end. I did not miss the Goblin's bonus. When I got tight, I could always level off low-level monsters. However, having an inordinate amount of extra Mana potions made me play much more confidently against the last bosses (despite missing the Crystal Ball!).
So either I'm still completely clueless about what makes Goblins so awesome, or they're just not my thing... In any case, I consider them more of a niche race, awesome with Assassins, outshining any other race on short levels, and generally pleasant all around, but resembling the Dwarf in my book from the perspective that the bonus they offer (bonus XP at the right time) is relatively easily attainable with other races on most levels, by playing the right way.