It started during a Scarlet Monastary dungeon run. The healer was in the wrong place and the tank died to trash mobs. There was a bit of 'what the heck, healer?' tossed around after the rest of us downed the trash, and the healer explained that his neighbours had been playing loud music and he'd had to close the window. Well, no harm done, let's move on...
Then he says that it was Arabic music. Then he says that he hates Arabs. Then one of the other party members responds that HE'S an Arab.
What followed was the most idiotic debate on racism, immigration, stereotyping, and Danish-Swedish relations that anyone could hope to construct.
I say idiotic because neither side was expressing heaping helpings of vitrol (this is not to say the conversation was not irritated, but it wasn't quite an out-and-out flame war), and they apparently didn't hate each other more than they wanted to finish the dungeon run. The idiocy, of course, was mostly coming from the healer. Everyone else told him to grow up/shut up several times before finishing off the bosses in a kind of disbelieving silence.
I really wish I'd grabbed screenshots of this...my summary doesn't do it justice.