How can I ignore racial prejudice at work?

I am Caucasian, and work with both Caucasians and African Americans, and respect and like all equally. However some of the whites are openly prejudiced against the blacks, and this bothers me. I don't know how to respond to the "N" word comments. So far I have told these men (they are ALL men who are doing this) that I have black friends who are much nicer than some of my white friends (of course, they didn't take it personally like I meant it). In this day and age, it's hard to believe people still have such backwards ideas. God created us all equally and loves us all equally, even those prejudiced against others for no reason. What are your thoughts? Should I stop trying to be friends with the prejudiced folks? I will not stop being friends with the blacks; they are very nice and I admire and respect them all. They did nothing to deserve the attitude of the cavemen.