Yes, it's pretty much just calling someone a hypocrite.
Real conversation:
Nick: Shut up. You're so annoying.
Twichell: Nick, you're a pot calling the kettle black.
Me: RACIST.
Nick: What does that mean?
Twichell: No, Natalie it's not racist. Nick, it means you're a hypocrite.
Whole Class: OOOOHHHHHHH!
Pot: Hey, black kettle!
Pot-smoking bystander: Hey, man. Make peace not war, man.
Kettle: Well, if that isn't the pot calling the kettle black?
UrbanDictionary.com reader: WTF?!! THIS DEFINITION SUCKS BALLS!