There is, of course, the racial aspect of a character, which will affect him every time he speaks to anyone in the game.
Different races react to other races with varying degrees of humor or disdain.
Then there are the players choices in his statistics. And then there are choices in skills - concentrate points in your thieving skills, and you'll be better in that area, while someone who wants to be a diplomat should spend more in the social set. Any points spent in the technological disciplines not only makes you more knowledgeable in that area, but also raises your technological aptitude, which in turn makes it more difficult for you to cast spells. The same applies for studying the colleges of magick. And, of course, the choices you make while playing our game will be the most tangible way to develop your character.