The races all got changed back, or sometimes across; in general people either stayed as they were, changed back to what they were before the Ley Pulses, or changed to something one of their ancestors was (like elemental elves swapping colour). Atlantis is presumably still around, but is surrounded by impenetrable storms. A couple of True Dragons (non-elemental dragons) flew to Durholme and back, to drop off the surviving characters, probably being seen by quite a few people. There was a brief outbreak of dragons who all then flew off to Atlantis just before the storms brewed up.
Informed speculation on the actual fall-out of the 3ygb:
1) You could change to any of the remaining basic races (humans, true dragons, dwarves, true elves, uruk, vani) or anything your ancestors had once been (so elemental elves could often change colour and so forth). This was more-or-less subconscious. You could also choose to stay dead, as everyone in the entire world died just before the world was remade. There have been reports of Azreal being sighted just about everywhere, but I'm not sure how true those are [It would be handy to know how true they are because people have been assuming they are true at me]. There are no more Daedra.
2) Atlantis stayed up, but the Vani and Dragons wanted their isolation and put up storms around it. (Most, if not all, people who changed into dragons or Vani went to Atlantis.)
3) The race known as the Daedra ceased to exist.
The Primordials and the races:
The Primordials are Creation, Knowledge, Order, Balance, Chaos, Wisdom and Destruction.
Their races are Humans, Elves, Dwarves, Vani, Daedra, Uruk and Dragons, possibly in that order. (Vani are definitly Balance. Elves are definitely Knowledge. Uruk are definitly Wisdom.)
Those are the basic races. Other races are corrupted versions of these. Elves and Dragons now come in elemental varieties due to the Ritual of Elemental Soul. The Daedra became the Demons, almost to a man, and the Uruk became the greenskins (orcs and goblins both). Some Elves became Kender. Some Dwarves became Duergar, corrupted demon-worshippers. Some Vani may have become Mewlips, although the evidence for this is more tenuous especially as there were no big reports of mewlips turning into Vani through the Ley Pulses.
The Fae are something else entirely. They are the dreams of the sleeping Primordials. When the Primoridals awoke (which was basically the plot of the 3ygb) they turned into Archons, avatars of their Primordial (their waking thoughts).
Creation is linked to the point of Origin. Destruction is linked to the point of Oblivion. Azrael appeared to turn into an Archon of Destruction at the end of the world. Balance is linked to the physical Prime Material, which is why the Vani are sensitive to (can 'smell') extra-planar beings and powers.
The Vani:
The Vani are a race of lizard people. They are skilled astrologers (and alchemists, and everything mundane) but have no gods and no magic. They are split into castes: River, Plains, Forest, Temple, Hills. I shall probably write more information about them when I am reunited with my Vani Briefing Pack. They are very cool but they are *all on Atlantis* and only work in large groups.
The Dragons:
Pretty much what Library/OnDragons says, except that only Air dragons could fly naturally and this was in fact quite a big issue in draconic politics (True Dragons can fly; lots of dragons felt cheated after the Ritual of Elemental Soul because they couldn't any more, although basically all the dragons except the Earth dragons learnt how to fly magically.)
What actually happened on the 3ygb, in some kind of rough order
The brave adventurers from Durholme, including the True King of Atlantis, had managed to get themselves captured by the ex-Drow who held most of this part of the island, including the Temple of Balance (which had mysteriously reappeared fairly recently). Whilst the Cambridge party were still travelling towards the Temple (not knowing that it was overrun with ex-Drow), the Durholme party escaped and were just facing off against the ex-Drow over the artifacts they'd taken, including the Bastite's baby (who was supposedly some kind of artifact in themselves).
The Character Party
The Cambridge character party consisted of Curtis, a Wilderness type played by MagicalEric?. NPCs who were pretending to be characters were Lucus Arundel played by Snapdragon (who was the Chosen of Destruction) and Serenity of the Plains, a Vani played by ChessyPig who was introduced to the character party on the Pre 3ygb Adventure (after her monster part Vani survived and she negotiated with the Durham types to keep them).
There was also a character party from Durham, consisting of a priestess of Bast who had the sacred child with her, a priestess of Triplicity, an elf who was supposedly the reincarnation of the True King of Atlantis, the last Daedra, and a dark mage, that I can remember. There was also meant to be another Vani, who was actually a PC Vani, but they had been killed on the Durham Pre 3ygb Adventure. (Which was both a blessing and a curse, as they were meant to be Serenity's husband.)