I always thought that episode managed to handle the subject a lot better than most childrens' cartoons.
I really love the fact that Val-Yor differs from the standard unlikeable jerky racist that normally serves as the antagonist. Before you realize that he's exremely prejudiced towards Tamaranians, he seems like a likeable stand up guy.
His animosity towards Star starts out subtle and slowly becomes more apparent as the episode goes on. He's a fairly realistic prejudiced character, IMO, especially towards the end when he calls Starfire "one of the good ones". It's also pretty noteworthy that he doesn't do a moral 180 and suddenly learn his lesson at the end and decide to be tolerant and wonderful, he's the same racist jerk he always was.
I'd not so much say it was covering up the black analogy, as it was more keeping in step with not directly reffering to actual, real-word racism. It's a lot less complicated that way. Still, it desn't take a genius to notice the analogy in that scene.
I really love the start of it as Cyborg cheerfully call her "Troq", thinking it's a term of enderment, not getting what it really means, not unlike how certain... other words are tossed around carelessly.
But that bit might just be me over anylizing