I have been to Kyoto three times in the past 4 years, and I have never seen any outright acts of racism myself. People in Kyoto, mostly the older folks, will have no problem with non-Japanese, unless your background is Korean. There is a large Korean population in Kyoto, mostly the outskirts, and they have had some problems, mostly in the distant past. Still today, you can hear about a Japanese person born in Kyoto, but with some Korean ancestory, being denied entrance into a top school, or a top level job/company. There are even specialized detective agencies (well at least one that I know of - Toromo? Investigations), that do background checks for families whose son/daughter is bout to get married. They check out if the bride/groom has any Korean ancestory, but, only the rich people use this agency, or even care any more. If you are caucasian, you will be fine, and if you speak some Japanese even better.
If you are looking for P4P, Kyoto does not offer a lot of choice. There are a few parlors on Pontocho, south of Shijo-dori, but never been in one. There are hostess bars all along the first street north of Shijo-dori, on the east side of the river. Can't remember the name of the street, but if you cross the river going east of Shijo, and turn up the first (or second) street, the first street running east/west is the one. If you are Gaijin, you are better off heading to HUB or Bar Africa. These two places are generally full of annoying English teachers trying to score, or more annoying Euros/North Americans ex-pats whining about how much Japan sucks...although they have lived in Japan for 10 years. I met a couple of live girls at both places. Best of luck