In the past month Ive had 3 people ask me what my ethnicity is, then when I responded, "Im black and white" They said, "Oh, you're a mulatto?"

Now if that was the preferred nomenclature, I'm pretty sure I would have used it myself. So either they are really dense and unable to infer so much from my answer; or even worse they think that its the proper term, and that I did not know, so they are trying to educate my unfortunate "mulatto" self.

So no, mulatto is not pc, and is most certainly an outdated term.

case in point, quote from wiki entry on mulatto:
Although still in use, in the last half century the term mulatto has fallen out of favor among some people and may be considered offensive by some in the United States. Today the preferred terms are generally biracial, multiracial, mixed-race and multiethnic. Note, for example, that President Barack Obama is never referred to as mulatto, although he had a white American mother and a black Kenyan father.
a little anecdote, about 4 or 5 years ago now, when I was a super fish I ran deep in a 10+1 on stars and was in IRC. Rippy offered to coach me to first, and I accepted.. back then he was pretty well respected on these forums. Anyways, we ended up doing the coaching over the phone, and in the small talk this same conversation happened where he concluded, "oh, so youre mulatto."

Anyways, back to the jokes. There were a few that I didnt see posted that I had expected, but most of all I was surprised to not see "house nigger", esp seeing as spoon has posted in this thread. Also "high-yellow" makes me laugh.