[AmericanInTokyo]

Here's even a foreigner in Japan with his own website referring to himself as -- gasp-- a "gaijin"!

At: http://www.nanyo.net/e/mag/gaijin_eye/people.html

[AmericanInTokyo]

Text from a travel site: "If you're looking for a place to live in Japan, The Wind Site: Roomate and Guesthouses in Japan should be the first page you check out. The site's creator, Miyuki Kanda, has visited some of Tokyo's most popular Gaijin Houses, and written detailed reviews of them. There are photos, maps, prices, and contact details. The Gaijin House information is very good, but the best part of her site is probably the Roommate Wanted Bulletin Board. Although a lot of the messages are in Japanese, there are lots of good deals and because you are sharing a room with a Japanese person, you probably won't need a guarantor or have to pay key money."

If its such a nasty word, why do people use it in such an unapologetic and positive way?

You must have had somebody look at you bad and point a finger and say 'gajin', and you took it from that that the whole word denotes racism somehow. My, there is even an amateur actor's group of foreigners in Tokyo for years called "Gaijin-za", and nobody ever got hot under the collar.