This guy is a bone head but he should not have been sent to jail. The incitement to racial hatred law is an overly broad assault on freedom of speech. The law lacks a mens rea requirement of intention and in doing so, forces the speaker to consider any prospective listener's contemplation of his words before he speaks. This inevitably has a chilling effect on speech. True freedom of speech requires a robust exchange and contest of thoughts (even if some thoughts are far outside the mainstream of views). Racists are morons. They are best defeated by challenge and debate. Restricting speech in the way that this law does, chills debate and fuels the martyrdom complex from which groups like the KKK and BNP source their power. Forcing these groups to contest their ideas in open debate serves to expose them for their intellectual deficiencies.
I have written on the differences between US/UK law in this area - http://www.guardian.co.uk/commentisfree/cifamerica/2011/mar/04/freedom-of-speech-us-constitution-and-civil-liberties