I have to agree that we're all xenophobic to a certain extent; didn't your mother tell you not to talk to strangers (your earliest lesson that "unknown" = "fear")
Those who are lazy enough to be "fed" knowledge by the media rather than seeking "fair and balanced" information on their own are destined to stereotype others.
Are all Arabs terrorist zealots? About as much as all Americans are skinhead racists, or all French people are as snobbish as the Parisians, or all illegal immigrants in the USA are hispanic. I could go on...
But Stereotyping is FUN. Not to mention easier than actually creating your own opinion.
I mean, where would we be without the term "redneck"? Would we all be driving cars with low clearance and no place to hold large quantities of firearms? Would there be no such thing as "manufactured housing"? Or "Milwaulkee's Best" beer in aluminum cans?
Or what about "pimp"? Without them, men would not be allowed to wear fur coats or gold chains. And Cadillac would probably have gone out of business. And pants would actually fit. And prison outfits would be worn by...well, prisoners.
There seems to be a fringe element in all social, ethnic, and societal groups, and it is they who garner the most media coverage (a building NOT on fire is hardly newsworthy). I would venture a guess that the SILENT majority (rational, wise, or whatever you'd call them) would view these stereotypes with the grain of salt that they require.