Seems pretty appropriate for a D&D based game to me. They should at least do more damage to make you think twice about just speeding your way thru a dungeon.
They say on the website what Items would be available during the beta and it was only the title, bag and gems. I am pretty sure they will be wiping all of the beta characters before actual launch or this would be the first beta I have ever done that carried them over into the actual launch of the game.
Will probably start out with a Drow control wizard if I enjoy the game play if not I will start out with a halfling Rogue which I really enjoyed playing this last weekend.
Noticed this also but I was not playing a Tiefling. There was one standing next to me when I started the conversation and its tail was showing up in the conversation.