Yes, Germans stare but it is not due to racism or Ausländerfeindlichkeit. The cause of all this staring is rooted in the past, it the big-brotherish type of behavior of the Stasis in the east and there has always been a strong sense of civic duty in the West, it is especially strong in grey haired individuals (grannies). The Spiegel referred to it as the "Germanic Stare down" Don't take it personally, they stare at everyone,even each other.
You are stereotyping, remove the thorn from thy own eye.
In my travelling experience that is an over analysis. I lived in Italy, Spain and Germany as a black man and they ALL stared - similiar to Germany.
Never really bothered me too much..my sister got so pissed after 5 years living in Italy she would say something i.e. what the fuck are you staring at. It did though, get a bit disconcerning when you were eating in some yick of a restaurant in Spain (and they were all staring like a Cowboy Western) but...I put it down to me being exotic compared to the black sellers/traders on the street!!
So I don't think you need a huge sociological explanation - some cultures it seems teach their children not to stare at differences and others do not...
If there are any half-germans/germans here or people with the experience about what so-called manners are taught in Germany that would clear it up...as for me - one was always told as a kid not to stare "It's rude to stare"... (Standard saying to Brits - I think! - even working class oinks like me).