Currently, there is a theme named NoBama in the iGoogle Theme directory that shows a picture of two confederate flags with President Obama hanging from a tree.
Here is a picture of it:
As you can imagine, this is an extremely offensive and outrageous theme to find on Google.
There were two threads about this on Google Web Search Help where it was reported on October 5th.
Jimmy from Google confirmed that this theme will be removed soon. He actually confirmed this about two hours ago. I personally still see it, but it does take time for content and themes to be removed from the iGoogle Theme directory. Here is what Google said:
This iGoogle theme has been reported for review and appropriate action will be taken shortly.Thanks for the heads-up regarding this theme.
Racism and hate will likely never go away, but to find themes like this creep into a Google directory - well, it is very sad to see.
Forum discussion at Google Web Search Help.
