This is a classic smear campaign, started deliberately by the Webb campaign through the ultra-sleazy Salon website, and then picked up verbatim by the leftists at the Associated Press and the Allen-hating Washington Post. I have contrasted especially the Post's running with this story without any additional reporting and sourcing, to their refusal in 1998 to run Michael Isikoff's scoop aboout Bill Clinton having an affair with an intern, because they didn't think it was sourced well enough!
You are completely right - it is nothing more than a smear campaign and a childish one at that. The sleazy connections of this Shelton dude with the anti-tobacco groups reeks of set up. Then you factor in the comment Shelton's wife made about "they told us not to talk to Fox" -that's a dead giveaway to dirty DNC fingers.
His father was a football coach who coached and hung out with many black athletes.
George Allen was a very, very good football coach and super motivator, not only for the LA Rams and Washington Redskins, but later at Pacific University (IIRC). He treated EVERYONE with the true respect necessary for real motivation to take place. There's no way, absolutely no way, that George Allen's son could be, or could have ever been a racist.