I have not seen Borat yet, however I have heard its pretty funny.
However, there are some people who do not think its funny. Including some of the people who were in the movie. They have filed a lawsuit against Twentieth Century Fox, though oddly enough not against Sacha Cohen.
The plaintiffs, who filed as John Doe 1 and John Doe 2 to protect their identity, claim that they were the frat boys featured in one of the film's segments. They claim that they were duped into making racist remarks by getting them drunk and then having them sign their releases while they were intoxicated.
Now in my experience, inebriation does not bring out new things, it just removes that filter which prevents it from coming out in polite society. But hey, that's just my thinking.