I think Joe has it -- it depends on why you are singing the song. I have sung songs about Chinese in the goldrush which are horribly racist, but the racism is really obvious and i was using them to point out the racism of the time. I would never perform or record these songs for general listening.
We are currently working on a CD of songs sung in the goldrush of BC and have the "original" version of Yellow Rose of Texas in a diary. It uses the phrase " sweetest rose of color this darkey ever knew..."
We will change darkey to soldier, which fits with the story of who the Yellow Rose was, but will indicate the change in the liner notes.
Seems to me it is always a tough judgement call.
Richard