I think this really boils down to what you define as racism. To me (and I'd assume most people are running a similar definition), something cannot really be said to be racist if it doesn't have a (negative) impact on the subject. For instance, in the scenario that comeatmebrah presented, although it is quite exaggerated, I really see no problem in people conversing like that so long as everyone doesn't perceive certain 'racial slurs' to be offensive. Ultimately, these things that you refer to as 'racial slurs' are no more than a part of language. For instance, in a thousand years time, the word 'human', for instance, could probably be seen as something very offensive. To those who live a thousand years in the future, of course, the use of such words would not appropriate, but for us, it's perfectly fine. Same deal goes with the individuals as Melbourne High (and most other schools at that). Certain groups, namely MHS boys, would view such words as 'curry' to be perfectly okay and acceptable, and within that group, just like we don't find the word 'human' to be racist as in the example above, these words won't give off any racist effect. But comeatmebrah does allude to a valid point, because as an outsider, if you are offended by such words as 'curry' and you happen to walk past MHS boys using this word, then, to this outsider, the term racism could perhaps pertinent here.
But yeah, I ramble, but there's really not much point in arguing about this I think.
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