I'm all for in-game racism, sexism, any other -ism that leads to conflict (for characters, not players)....but it requires discretion. There is a fine line between pissing everyone off, and creating realistic and dynamic RP.
Something like "all women are whores" can spark OOC hate...something like "My character is so ugly that no women will look him in the face, therefor he thinks all women are whores out of spite" gives irrational in-character motivation a better face. If you go over the line (or you see someone go over the line), work with players in a friendly manner (OOC) to make sure both of you are having fun. Sometimes all it takes is a different presentation or a softer touch.
You have to be consistent, though. Sexism/racism should be played as a character flaw. If you aren't willing to demean your character more than the group he's demeaning, then you are being a dick. Be a villain that curls his mustache or be the egalitarian white-knight...but don't be the one who uses BM as a soap-box for real life hang-ups. Roleplaying games are for escaping real life hangups.