Whether Avatar is racist is a matter for debate. Regardless of where you come down on that question, it's undeniable that the film - like alien apartheid flick District 9, released earlier this year - is emphatically a fantasy about race. Specifically, it's a fantasy about race told from the point of view of white people. Avatar and scifi films like it give us the opportunity to answer the question: What do white people fantasize about when they fantasize about racial identity?
It would have been innovative and interesting if James Cameron had made the same film with no white actors. Want to talk about racism? How loud would the screaming have been if the actors had been exclusively East Asia or sub-saharan African? It is doubtful if Cameron could of obtained financing for the film unless he cast whites as the main villians.
It was perfectly fine for Hollywood to cast asians as the evil heavies during the thirties and forties, now it's the turn of the whites. And it's equally racist.