I think most non-Southerners' exposure to it is in media, where it's almost always racist in context. There's a surprising amount of subtly in Southern social interactions that I think it's missing from most of the US. Sure, Midwesterners are known for raising passive-aggressiveness to an art form, but you recognize it no matter where you're from.
The subtly in social interactions in the South are truly exceptional, hard to get a handle on, and unmatched anywhere else in the US - IMHO. Southerners have as many ways of being condescending as Eskimos have words for snow.
Is that phrase still acceptable, or is the Eskimo/snow comment now not PC? Is it still OK to use the term "Eskimo?" If the Eskimo thing is offensive, I sincerely apologize. An alternative would be "as North-westerners have words for rain," but I don't know if that's as widely understood an idiom.