TV commentators and others are viewing with alarm the use of Obama's middle name by some right-wing talk show hosts. The "Hussein" business strikes me as a rather childish dig of the sort you expect in politics and on talk radio. Not inspirational, but no big deal.
If you're inclined to take it seriously, though, why is it worse than Howard Dean's comment that the Republicans look like the 50s? In both cases you're referring to some aspect of candidates' personal identity as a way of bringing into play a general social situation--diversity versus a strong sense of the normal and expected--that some people find reassuring and others alarming. Of course, we're all expected to find diversity wonderful and normality oppressive, but why is that view more sensible than the opposite view?