If you and a friend want to play, but enjoy two different racial types, they wont be able to play together.
If my friend is a khajiit lover, but I like dunmer, we cannot play together without creating alliance specific characters. In terms of the small group dynamic the developers are attempting to emphasize, I think this prevents the "co-op" feel of playing with real-life friends and family.
OR
It means that we can only play together at level 50+ or in PvP/ Cyrodiil.
Either way, I have interpreted the available information to be limiting to player choice when coupled with real-life/ xbox/ PS/ PC/ media friends lists. Your friends may play the game with you and may be able to play as anything they want, but that doesn't necessarily mean that they can do both.
What do you all think?