Hmm, what is racism? I guess I'll just give a generic answer in that it's being intolerant, discriminating and feeling superior towards another person's race as well as labelling them with a stereotype.
Is there a middle ground? Absolutely - I wouldn't call myself a racist but I know a hell of a lot of racist jokes (and yes I know this is said often) but I DO have a few friends who are at the brunt of them and most find them funny as long as it works both ways. Which it does. I'll come right out and say that at my college most asian people bugged the hell out of me - you didn't have to be prejudiced to see that many of them wore their jeans around their dicks, wore clothes that were five sizes too big for them, played music at full whack with the windows down in their cars and worst of all, walked very slowly in groups down the corridors when you're trying to get to a lesson so it's difficult to pass.
Does that make me a racist for thinking that? It was in plain sight after all. At the end of the day I've never let that preconception cloud my views on an asian person when talking to them, so I'd say no.