"That's not what he said you ignorant wretch. Your spanish is worse than your english." - Tombstone
I'm surprised no one has really tackled the definition for this one yet! Bolillo is a name for varying kinds of Mexican (white) bread. I disagree with the other definition that states bolillo is a racial slur, however. I've traveled in Central America and Mexico (and Texas, my home) and never got the impression that 'bolillo' was a negative term. It is simply a general term for light-skinned, non-mexicans which may be used in a negative fashion. See 'gringo' and 'guero' for additional related terms.
Some bolillos don't learn spanish properly and frequently misspell words such as guero and esposo (the 'o' designates masculinity, which is important in espanol).