I saw this on a plane recently, and surprisingly find myself defending Shyamalan against RaceBending.com. Yes, the argument that the cultures depicted in the Avatar animation universe are clearly East Asian is sound, and the "heroic" Water Tribes and "villianous" Fire Nation are in fact populated by European and South/Southwest Asian people, respectively, in Shyamalan's film. However, I think there is something to be said for a major break with Hollywood cinematic tradition that this film represents.
Usually, it's the brown/yellow people who take the role of the quaint, valiant, spiritual "tribes" and the white folks who take the role of the imperialistic, advanced "nation". This is the first film I've seen that depicts white people as relatively backward, in-tune-with-nature types, while depicting the dominant military/technological superpower about town as a bunch of brown dudes.
So while I would have preferred that the Earth Kingdom was Chinese, the Fire Nation was Japanese, the Water Tribes were Siberian and the Air Nomads were Tibetan, as would be consistent with the original TV series, I think we need to take a more big-picture perspective on the "white heroes, brown villains" accusations lobbed at The Last Airbender.