they reset your stats to whatever the reccomended stats are on the char creation screen for that class. which is...not optimal in some cases. but generally not horrible.
Yeah, the stats now aren't as big of a deal in velious / raid gear. Though it would be pretty awesome if they sold a potion that allowed you to fix your starting stats after a race change. I wouldn't change much, but race changed last night and wouldn't have minded some minor tweaks.
So for a Necro that means they you're possible emphasis on Stamina over Int will be wiped out when the reset dumps 25 into int and only 5 in Stam. For many who used it to go Iksar at Kunark launch that isn't that much of an issue given their int/stam levels, which effectively balances out if you'd played a Gnome or DE and done 15-25 Stam and only 5-15 Int. Other choices, like going Ogre Warrior and getting some wasted on Strength, will really screw you over trying to make full use of those starter stats.
They did not wipe out my spells except for the race/deity specific ones I had I believe. One problem with them is if you change to a race that has an ability, like hide or forage, you will only be able to use those skills with the effectiveness of having 1 skill level. So if for example you switch from Human Druid to Halfling Druid, do not expect hide to work ever.
So I am aware that using one of these race change potions will reset your starting stats to whatever the defaults are on the character selection screen, but what if I change back to my original race from when I rolled the character? Do I get back those customized starting stats or do I just get the default ones yet again, even though I went back to my original race?