I think in fantasy writing, language helps give us an encompassing feel of the setting and culture of that fantasy world; it takes it one step further in creating a new, complete world. In our own world, there are bazillions of other languages. A very accurate number, I know. So why would creatures of other races, such as faeries or elves, talk in English? I admit, it's hard in books to have other languages, because you have to show in some way that they are not speaking in English (whether it's using italics, or translating, or whatnot).
Even if your characters are human, but in a different sort of world (whether fantasy or dystopian), hinting at different languages helps bring us into that world.
Another thing that can help world building is slang. This is especially helpful when your world does revolve around English-speaking characters for one reason or another. It's also easier than creating another whole language, though it can still be hard. Finding the right slang for your world takes a lot of brain storming. Where did the word come from? What's its etymology? Or is it simply another way of speaking?
Let's consider two books that I love. The Uglies [series] by Scott Westerfeld and HP by J.K. Rowling.
J.K. Rowling created great words in HP, really giving the wizard world the feel of another world, despite it overlapping London. Two of my fav words of hers are Death-Eaters and Mudbloods. On a purely word-creation basis, they're amazing. Let's do a little analysis.
Mudbloods. Brilliant, if you ask me. If there's anyone still out there who doesn't know, a Mudblood is a derogatory term for wizard who was born from a non-wizard family (aka muggle family, using, once again, another term she created). The whole reason Lord V. hates Mudbloods and half-bloods, is because their blood isn't pure, ie. they're dirtying the bloodline. This is really a perfectly created term. Once you think about it, it was a little obvious, but at the point where the term is introduced, it's used simply, for Hermione, because she came from a non-wizarding family (not specifically because her "blood wasn't pure").
Death-Eaters is a term I love, just because it gives such a vivid picture in the readers mind. Death-Easters have to be evil because only evil people would eat death. Or even have death in their name. But eating death just sounds icky.
So J.K. really comes up with some great terms.
Let's move on to Scott Westerfeld. I love his Uglies series for many reason, but one of them was definitely because of the way the characters spoke, which was how their culture spoke. It was different enough to make it seem like another world, but similar enough to make it instantly understandable. He takes a phrase, reverses the order of the words and sticks in a hyphen. For example, if someone wants to say, you just saved my life (as in an exaggeration to saving the day) the character would say "You're totally life-saving." Another example is saying "pretty-making" for something that makes you look pretty, or "nervous-making" for... you get the idea. It's simple, but effective, and definitely makes the world feel more different, yet real.
I'm working on slang and derogatory terms for my world, and I thought these two books were a good place to start.