I only read about half of the comments above, so far.
My grandfather was from Louisiana, and he used the word sometimes, to describe characters on TV like George Jefferson. My grandmother did not use any racial slurs at all. My mom and I did not use the word at home, my mom was not prejudiced and in fact, went out with a black man for about 15 years when I was young. I think her going out with him was, in part, some type of revenge on my grandfather.
When I was little, the neighbor (my grandmother’s good friend) got very upset because I made friends with an Italian girl across the street, and the neighbor called them “Guineas.” I never heard that word and we didn’t use words like that at home.
Polish jokes, Jewish jokes, black jokes, Italian jokes – all were common when I was a teen – that’s just the way it was. I told Jewish jokes to my Jewish friend’s parents and they loved them. Jewish jokes are probably still popular, Polish jokes, not.
When I was a teen and in my early 20’s, people would occasionally use the word nigger. I didn’t because I wasn’t raised that way. Black people would often, and still do often, call each other nigger, as in “What’s up, nigger?” They also use it in rap music (just listen to it and you’ll see).
As far as Paula Deen goes, I heard and I saw on the Food Network’s Facebook page that thousands of people are writing that they think it’s terrible that FN is not renewing Paula’s contract. They’re not actually firing her, they’re just not renewing her contract. I commend her for answering the question honestly, when she was asked in the deposition, and from the era Paula lived in, down South, yes, it was probably a word used often in white households and heard often all over, and not shameful at the time (you figure when Paula grew up and lived there it was the 1940’s-1970’s).
Yes, Food Network is “covering itself” by not renewing her contract, but there are a lot of pissed off people out there.