Actually, IIRC, the small races in the PHB are at quite an advanatage from a balance perspective: normally the bonus from increasing from small to medium is a +4 str, -2 dex meaning that the converse ought to be a -4 str, not a -2. The halfling can have the highest attack bonus of all the races at 1st level with throwing weapons: +1 from dex boost, +1 for size, +1 with throwing weapons, +1 (fighter BAB), +1 Weapon Focus, +1 Point Blank Shot. That's +6 without taking rolled dex into account. If you put your highest stat and for argument's sake, let's say it was an 18, you'd have +10 to hit with throwing weapons at 1st level. The only draw back then is damage potential with the reduced base damage from using smaller weapons and your str penalty. You can't offset low damage with Power Attack (because they are throwing weapons), monkey grip isn't really worth it (the -2 offsets the size and throwing weapon bonus, and the increase in damage is not significant (only 1d4 to 1d6 or 1d6 to 1d8). So, you have three options it seems to me: go with feats: Weapon Specialization, GWS, and exotic weapon proficiencies to get dire weapons or heavy weapons (AU, and FRCS respectively); go with ranger and focus on your favored enemy damage and take extra favored enemy and the feats that increase damage to your favored enemies; or get sneak attack damage. Of the three, I think the last has the greatest damage potential. Invisible blade would seem the obvious choice giving you +3d6 sneak attack dmg at full BAB.
There is one other option to consider: instead of trying to increase damage (or in addition to) you could try and increase your number of attacks. They have the same net outcome. You could go for rapid shot, manyshot, improved rapid shot, expert tactician (not sure if that works for ranged attacks), halfling skip rocks, etc.
For a viable halfling fighter I'd say you need three things: increased movement, increased damage, and versatility between ranged and melee attacks.
You could go with something like: Ranger 7, Fighter 8, Halfling Outrider 5,
feats: mounted combat, mounted archery, point blank shot, far shot, rapid shot, many shot, improved rapid shot, weapon focus, weapon specialization, weapon finesse, exotic weapon proficiency - halfling skiprock, precise shot, greater weapon focus, extra favored enemy. You'd be looking at potentially 10 attacks, would have great movement options, and if you got the right kind of skiprock (returning with energy enhancements) would not have too much problems with damage. Certainly this is not the most powerful build - no one ever thought that the outrider was broken to be sure. But go get yourself a cheetah mount, and it could be quite cool.