This is not an issue I face in any practical way (with relation to Aboriginal people - which is the center point of this particular discussion) - as I very rarely come into contact with Aboriginal people in my area - and when I do - they are usually westernized to a degree that separates them from their own unique cultural ways and heritage.
More broadly speaking - I think that racism in general is an undo focus on race and (often associated) culture that places negative or derogatory titles on individual persons that are associated to the group by reason of their ancestry or heritage. It is a way to minimize, categorize and generalize an individual in a negative way based on this. A kind of stereotype that is scornfully dismissive of the fact that the person is human first, and of a particular ancestry or heritage second.
I also do not see all traditions or ways associated to groups as equal (moral or otherwise) and therefore reject the notion of "embracing differences" if by that one means adopting those differences - or worse - catering to them especially if they infringe on the rights of others (even those within the group).
Back to Aboriginal culture in particular - what little I know is from tours (been to the Northern Territory, been to Uluru, Coober Peedy, been on a few cultural tours) and, well, the culture itself is not something I would adopt or embrace, but would be fine to tolerate as long as it didn't have any negative impact on me (including raising my taxes to accommodate it - or exploit it).
