I haven't run afoul of the elves in the current version of DF, but in the previous version I discovered it was far more fun and profitable to piss off the elves until they went to war with me. To begin with, I was having a devil of a time finding any coal or lignite, so trees were my only fuel for my forges. The 100 tree limit was a major pain. I went over it accidentally a few times too many, and they started sending ambushes. As mentioned earlier, they are generally pushovers, and I ended up with a lot of crappy wood armor and weapons, which I then traded to the humans and the other dwarves for *real* items. So I stopped worrying about the tree limits, wiped out the elves every time they came, and started amassing piles of elf skulls and bones, as well as building a thriving unicorn meat and leather industry. The training was also good for my military. The only problem was that despite my turning down all of their attempts to make peace, they finally just stopped attacking after a while. I'm not sure if they ran out of elves, or what.
I have yet to go to war with the elves in the newest version of DF, although I plan to. For one, I just hate them elves. All pointy-eared, condescending, and ridiculously tall. Secondly, they bring little of value, other than pets and some other miscellaneous junk. At least in the old game, it was much more profitable to kill and loot them.