and on a more serious note - older folks aren't understanding that kids in school these days are actually becoming far less racist, yet using mild and even vulgar racial jokes more and more.
What is happening is kids are just softening up, many disgruntled with the overly PC nature of most conversation these days.
Many of the people taking part in the jokes are ones who, if it weren't in jest, should be offended.
The kids find it acceptable to poke fun with "racial jokes", but the jokes offend only the most prude individuals. Most often, the jokes are directed back and forth amongst the very racial/ethnic groups that are the subject of said jokes. Most reasonably-socialized individuals find no harm nor offense, because apparently unlike parents, kids CAN tell the line between things said in jest and in serious tone.
I'm only 4 years removed from high school.. Jews, Polocks, Mexicans, Indians, East Asians, Blacks... you name it, there were jokes. It never fell out of fashion here in college either. Often at least one individual from said group was involved in the conversation, and poking back at us whenever possible. Us whiteys just have little in the way of stereotype to poke fun at, so it's always localized based on the regional culture - better suited when whites from other regions are involved, than regional cultures get bashed.

Are we ever serious? Well, define serious. Stereotypes have an inkling of truth, exaggerated yes, but still present. But are they the subject of hatred or anything of the sort? Nope, just the material for jokes. Most kids aren't acting on these, rather using them as jokes. The younger generations, in essence, are trying to break PC boundaries, as always.
Now, it also depends on location. Some areas are more prone to breeding pure hatred, for whatever reason.
I've been in public schools my whole life, and have experienced quite a bit. I hate certain types of people, and thus, localized cultures (inner city for instance: race never matters there, just the culture - there are many "good" blacks in an inner city environment, and quite a few "thug" whites). Racism will fall away as soon as the PC boundaries crumble and certain antagonizing activities fall out of favor.