Well we never had slavery or blackface entertainers here. Thus for most Belgians it doesn't feel racist at all. The official rep these days is that Pete is black because he climbs down the chimney all the time,not because he is a negro. The historical truth is that Saint Nickolaus was a Byzantine Bischop who had Arab servants. The Belgians made him a Spaniard with a black servant (can you blame them? 99% of the population had never seen a black man or an Arab. And by the way for the childeren, Zwarte Piet is somekind of hero, He is always playing tricks on Sinterklaas and is the funniest guy in the world+ he gives you toys!
Almost correct in my opinion: It's not a typical Belgian custom, but reaches to most Dutch/Flemish/German speaking areas (Holland, Belgium, Germany, some [former]colonies)
http://en.wikipedia.org/wiki/SinterklaasTo say that we never had slavery here is not entirely correct either - The Dutch were the most notorious slave drivers out there. In the Dutch society they might not have been introduced as such, but in the colonies it was definitely common practice. South Africa being one of the long-lasting ones.
IMHO, the story is pretty innocent, and part of our culture, but it is one of those 'hidden' things that sets kids of on a wrong start. If you always depict someone in a certain way, it's hard to imagine them differently...
More on topic - I'm estatic that playmo created Sinterklaas!! I love him!