They get both attack and damage enhancements.
Racial Weapons:
Dwarf - All axes, +2 to-hit, +2 damage with one handed axes, +4 damage with two-handed. Martial characters get proficiency in Dwarven War Axe
Elf - Bows, +2 to hit, +2 damage. Longsword and Rapier +2 to hit, +2 damage OR Scimitars +2 to hit, +2 damage and Falchion +2 to hit, +4 damage. Get Longsword, Rapier, and Longbow proficiency for free.
Bow enhancement is by itself, LS and Rapier or Scimitar/Falchion are exclusive of each other.
Drow - Shortswords and rapiers +2 to hit and damage, get Shortsword and rapier proficiency for free.
Wait until you group with a caster or Bard who values haste. TWF (two-weapon) is higher dps, or damage per second, and also rules over effect bonuses (like Smiting or Disruption). THF has less cost, needing 0 feats for nearly 100% effectiveness on single targets, and higher base damage per hit.
Attack-speed wise, TWF is a bit faster due to swinging both weapons. Rangers get, for free, all three TWF feats, so make the best use out of them. It's not that they swing faster, you hit a lot harder with a two hander. Early on, before getting Greater TWF, you're probably better off with a big two handed weapon, as you only get 40% off hand strikes. After you get GTWF, TWF wins hands down. You're getting basically twice the attacks.
Of course, this is single target dps. two-handers get glancing blows, which give them a bit of AoE damage. That's not really worth taking into account unless you have the full THF chain. But glancing blows help push THF into higher total damage, even if they don't do the same level of damage to a single target.
Unless you have an epic Sword of Shadows. That does more damage than anything else in the game. With the right augment slot and an artificer, it'll also break any DR in the game just about. A Paladin will probably not need the artificer.
*edit* ran a Shroud and finally got my Shrapnel. Unfortunately, it was out of the end reward. So I have to wait until Saturday at the soonest. My Axe is now a Lightning I axe at least. Need two more LDS, 3 more large stones, 2 more chains, and 5 more large shrapnels. At 2-3 per run, that will take 5 or 6 runs of the Shroud, optimally.