Ive been in the south and I telll you I would never live in the south. Racism does exist, its just hidden.
Whites stay with whites as black stay with blacks in the south. I was in Mississippi for a few weeks. I hated it there. For someone to say that they dont notice it must not be seeing the big picture.
Here's the difference in the South vs. the North:
In the South, things are more segregated. As you say, blacks tend to hang with blacks, and whites tend to hang with whites. However, this is by
choice, not by fiat, and what you're missing is even though the groups keep to themselves, there is genuine respect between the two groups, and little or no hostility or racism. (at least in 2006, 40+ years since the civil rights movement).
In the North, the groups tend to mix much more frequently, but here's the difference: when they (whites, blacks, or whoever) get into a group that includes only their own race, a lot of serious racist attitudes and hostility comes out that is hidden just below the surface. Because of this, I tend to think the North is more racist than the South, and I am a native Northerner who has lived in both.