Adaan wrote on the European WoW forums, he had the displeasure of encountering some players who use a certain racially offensive word, and it made him feel very angry.
It turns out that if you encounter such language in WoW, you can report other players for racism. Vaneras stepped in to confirm that Blizzard does not tolerate racist language, and such comments will get those players banned. Although I have not encountered racist language in WoW myself, I heartily encourage anyone who does to report that player. Dealing with racism in real life can often lead to awkward confrontations with people who refuse to admit what they were saying was wrong in any way, but in WoW, Blizzard is all set to do that for you, while at the same time helping to make sure there are negative consequences on racist behavior.
Although Vaneras doesn't mention it in his post, it is my understanding that the same also follows for other forms of discriminatory language, such as sexism. While of course there can be a lot of annoying grey area in such issues, another reason to such offenses in WoW is that Blizzard may actually have proof of what the other person said stored in their systems, and a genuine problem is more likely to receive a real consequence than might otherwise be the case.