Even if you can speak no other words of Thai, most European and American
visitors to Thailand will quickly become familiar with the Thai word farang
(often mispronounced (even by Thais) as falang - farang with a slightly
trilled 'r' is the correct pronunciation.) It's basically used to describe
caucasians, though African-Americans will sometimes also be known as farang
or as farang dam ('black farang'). Farang is also the
Thai word for the guava fruit, so you can expect to hear farang eating
farang 'jokes' if you happen to purchase any.
Other Asians are generally known by their country of origin (e.g. kon
jeen - "Chinese people", kon yee-bpun - "Japanese
people"), while people from the Indian Subcontinent are often known
as kairk (which translates as "guest"). Kairk is
used to describe even fluent Thai speakers of Indian descent who have been
living in Thailand for generations and consider themselves as Thai - obviously
being referred to as a 'guest' in these circumstances, while not particularly
offensive, is not exactly complimentary either.
Some people get very offended at being called farang, but whether
it's an insult should or not really depends on the context. A few Thais
who are uncomfortable with using it will say kon dtahng bpra-tayt
('people from other countries') instead, but this is still pretty rare.
Farang is basically a neutral word, but people who respect you (or
who should respect you) will not use it - if you hear a work colleague,
for example, refer to you as farang they probably mean it as an insult
while a taxi driver or market vendor doing the same is unlikely to mean
any offense at all.