Hey, I'm very proud of my French ancestry. But I know you hate me for what I am, and not my ancestry, so it's OK.

Related to this topic of "Political Correctness" is the question of ethnic humor, and I guess I would include religious humor on a par with ethnic humor. I would hate to see ethnic humor done away with, but it is a very ticklish subject. In the 300,000 thread somebody told a joke about a dying Jewish man eating chocolate chip cookies his wife meant to serve at the funeral. I heard Garrison Keillor tell the same joke as an "Oly and Lena" Norwegian joke. I thought it was a pretty good joke, no matter what the ethnic group. I went to high school and college in Milwaukee, which has a huge Polish population, so I heard lots of "Polack" jokes - those were often quite nasty. Then there was the "blonde joke" fad, which tened to have a sexually demeaning tone - but some of them were light and funny.
I'm Catholic and work in the church and attended a Catholic seminary for 8 years. I guess I've heard every priest/minister/rabbi joke ever thought of. Can't say I've minded most to them, but they do get tedious. Most of the time, I have been amused or no more than just mildly annoyed by anti-Catholic jokes, but I do have a few hot buttons. Jokes that depict priests as sexual predators are probably the worst - yes, there is a problem, but it is a very small minority of priests who are the cause of the problem and it horrible to defame all priests because of a few. Another is sexually degrading jokes about nuns - those are usually a double attack on both their gender and religion. I would bet that sexually degrading jokes about any ethnic group or religion could be a sensitive area, so maybe it's best to stay away from that.
I'm sure every group has its "hot buttons" - areas that are particularly offensive. I think we should be careful to avoid those areas in our humor, but I don't think we need to completely purge our language and culture of all ethnic humor.
There are certain things that various groups hold sacred, and those are sure "hot buttons." Joking about the Western Wall, Calvary, or Mecca can offend Jews, Christians, and Muslims quite easily, I believe. I don't think jokes about the dietary rules of the various groups are quite so sensitive. At least, I never have minded "mackerel snapper" jokes.
Much ethnic humor springs from the ethnic groups themselves, and that sort of humor can often be rich and interesting (but can also be demeaning if it falls into the hands of the wrong people). Just because a Jew tells a Jewish joke, doesn't mean that a Gentile can get away with telling the same joke.
It's an area to be careful in, but it's also an area where the objects of the humor need to try not to be overly sensitive. Much ethnic humor may come off as offensive, but very often it is not intended to offend. Very few of us tell jokes very well, so our attempts at humor often flop.
-Joe Offer-