philipMac

It seems pretty simple to me.
If someone calls a person something that is not their name, and that person finds what they have been called racist, they have the right to feel offended.

There is no room for maneuver.

Its up to the person addressing the other person to come up with a way to address that person that cannot be considered racist.

If it is meant in good spirit, or jokingly, then this should be clear. But, even when it is meant jokingly it can still be degrading. I know an Indian guy that wont be with a certain groups because they are called Apu.
I was there when they were all doing this, and it seemed like my friend didn't mind at all (even though I felt uneasy). It was only later, when he would not come out when that group was present did I find out that this made him very uncomfortable, but since he is a tough NYC sort of guy, he just laughs it off at the time.

So, basically, its not acceptable in almost all cases. Its aggressive, its patronising and its deeply deeply not original or funny.

I am surprised, or maybe not really, at some of people's attitudes on this thread.
It is not, it is absolutely not the same being called Gringo when you are in South America (or jibes at that sort of level), or being called Paddy when you are in a bar with a load of other Irish people, as being called "Paddy" by some very unpleasant and large skinheads when you are alone in some housing estate in Brighton.

That people dont understand that difference frankly seems not believable to me.