We were talking about Breakfast at Tiffany's the other day and Fenris mentioned Mickey Rooney's role as the Japanese janitor. No matter what you think of the rest of the film, the scenes with this character bring it to a screeching jaw-dropping halt. LOOK at him:
The old practice of casting whites as non-whites lead to quite a few questionable movie moments. My own Myrna Loy was generally cast as an "Oriental" (read: exotic villain) early in her career. Here she is in The Mask of Fu Manchu. Sexy, yeah - but not a terribly healthy representation of Asian culture.
Of course, it's not just casting that leads to this sort of stuff. Stepin Fetchit and Hattie McDaniel built careers playing the kind of stereotypes that are regarding as politically incorrect now.
Does anyone have any other examples to discuss?