Listen, Micheal Richards' is not racist. As an actor myself, I can understand Richards state of mind during that rage on stage. Just put yourself in his shoes. Here's a man who's biggest break was "Seinfield" and was adored and admired by millions of fans. The show ends and he hasn't had a decent role in a tv show or movie for about 7 years now. And what is to blame? Michael Richards typecasted as only being the character known as "Kramer". Forever, studios can only think of him as Kramer from Seinfield. Do you know what that's like? Your walking down the street and someone says, "Hey Kramer! How's George and Jerry?" every single day. You don't think that this could effect a struggling actor/comedian trying to make a comeback and prove that he is more than just some tv character he played years ago?
In other words, Michael Richards for these past 7 years has been tumbling down the ugly slope of actor typecasting. He's had a serious breakdown and his mind is not stable. So now he performs stand-up in one of the fewest gigs he can get and he's blowing it. He's not funny and he knows it, the audience knows it and they don't help by heckling Michael. So at this point, wouldn't someone like Michael snap? But he's unstable and desperate. The only thing that can come to mind is pathetically making racial slurs to cover up his insecurities. This man is not a racist. He's crying out for help!
Believe me, his state of mind shouldn't compensate for his rage, but it shows that he's not racist. He was desperate under the lights and snapped at the easiest target.