Alan, good job repsonding as you did.

I agree with you (and disagree with someone above) in expressing that you'd like to remain friends with the person. I don't know anything about your friend, but I'm sure that thoughtlessly forwarding a nasty message because he/she considered it a "joke" does not encapsulate that person's entire personality. I'm sure there are good qualities there along with that shortsighted racist tendency.

Maybe your thoughtful response will make that person stop and think.

I used to get this kind of crap all the time, but not recently. It's probably easier to deal with such tasteless asnd offensive "humor" via email than in person. Actually confronting this kind of crap in person can be pretty touchy sometimes (especailly when dealing with cooworkers you have to see every day).