Warthog sent scouts to each real-world stage location — Gateshead forest, Nevada, Canberra, Hokkaido, the French Alps, and the Arctic Circle — to photograph textures and measure road width and camber. Richard Burns was directly involved in development, providing feedback on the handling dynamics. Rally driver Possum Bourne and his mechanics also contributed, advising particularly on the Canberra stages. Lead physics programmer Eero Piitulainen later stated that the team's primary objective was realism rather than commercial performance, and that SCi Games did not fully appreciate how closely the simulation tracked reality. He observed that some reviewers misunderstood the game's difficulty as a design flaw rather than an accurate reflection of the challenge of rally driving.
The project carried the internal codename Rally7, reflecting its position in the lineage of the Rally Championship series. The game ships with 8 cars — including the Subaru Impreza WRC, Citroën Xsara WRC, Peugeot 206 WRC, Mitsubishi Lancer Evolution, and Toyota Corolla WRC — across 36 stages set in six countries. Most vehicles must be unlocked by completing driving school lessons or rally events. The soundtrack was produced by Paul Oakenfold, Andy Hunter, Pepe Deluxe, and the Plump DJs.
A version for the Nintendo GameCube was in development but was cancelled, attributed at the time to poor GameCube sales.
Critical reception on release was mixed. Individual scores ranged from GamesRadar's complaint that the game was "too unfriendly to be any fun" to GamesMaster's 88 out of 100. Within the dedicated sim racing community, however, the game won four awards at the 2004 Sim-Racing Awards, including Best Physics Model and Game of the Year, as voted by members of the Blackhole Motorsports community.
Although Richard Burns Rally launched without official modding support, Warthog subsequently released modding tools in response to community demand. The PC version became a platform for sustained community development: modders updated the physics model, improved graphics and audio, and added large numbers of new cars and stages. Community packages such as RSRBR transformed it into an active online rally platform. The original Xbox Live multiplayer service ended on 15 April 2010, but the game can again be played online through Insignia, a community-run replacement Xbox network. By the mid-2020s the game was still used by dedicated enthusiasts worldwide, more than two decades after its original release.
Professional WRC drivers including Craig Breen and Teemu Suninen used the game as a training tool. The FIA used Richard Burns Rally to teach rallying safety protocols to stewards during the COVID-19 pandemic, when in-person training was not possible.
The game was developed during a period of significant corporate instability. Shortly after its release, Warthog was acquired by Tiger Telematics to develop titles for the Gizmondo. When Tiger Telematics entered bankruptcy in January 2006 and SCi Games was subsequently purchased by Square Enix, all sequel development ended. Richard Burns died in November 2005 from a brain tumour, having become ill in 2003. No successor has been produced by any of the original parties.