This one is for the GM's here (that would make all of us I guess ).
Anyhoo for all it's lore and intrigue, I sometimes feel that Forgotten Realms can be a bit over the top at times, what with magic under every stone, and aberrations and freaky monsters galore; I feel more and more tempted to create my own homebrew setting that's a bit more subtle and toned down.

I would, fo course, start out small; a small city, a few villages, a few races etc. Pretty much in a small area, and a bit of background.

Any reflections on this?

You might want to try Greyhawk or Kingdoms of Kalamar. Low magic. more gritty and very adaptable.

Kingdoms of Kalamar intrigues me. I will seriously concider it for my next campaign. I epecially like the idea of a more realistic fanatasy setting and the blurbs about how "ordinary men and women" are what actually make up the setting. I chuckled at the bit about the monsters tripping over each other.

I bought the original Kalamar campaign book (when I was still playing D20). Its okay. Its not the "kick-ass" setting that they advertised it to be, or at least, I didn't find it that way.

My fave D20 setting by far is the Scarred Lands, by White Wolf. Its a much darker, grittier place than most of the other stock settings. Magic can be High or Low, depending on your style (I usually play relatively low magic, and no problems in this setting). The backstory is rich, the continent pretty well developed - although there are enough cool places to create a starting setting w/out an overabundance of materials to hamper you, if that is what you like.

I have just about all the SL stuff. Its been (sadly) discontinued, which sucks, but you can get a lot of the material off ebay and from game stores from relatively cheap, which is good.

"Gritty," IMHO, means that you're more likely to deal with "unsavory" but very real subject matters, such as murder, disease, revenge, and the unhappy circumstances that lead to such desperate acts.

Have you seen Sin City, or read the comic? That's gritty. Very film noir, but more true emotion, and less glossed-over.

More inner-city, and less Beverly Hills.