Increased racial and ethnic diversity is adding a new dimension to everything from product marketing to political campaigning.

There are 38.8 million Hispanics in the USA, according to the latest Census Bureau estimates released Wednesday. The figures, as of July 1, show a 9.8% increase since the Census was taken in April 2000.

The U.S. population grew 2.5% to 288.4 million in the same period. Hispanics accounted for half of the national increase. Non-Hispanic blacks, including people who say they're black and another race, grew at a much slower rate than Hispanics, up 3.1%, to 36.6 million. Hispanics make up 13% of the nation's population. The number of Asians also surged. They're up 9% to 13.1 million.

The population gains by Hispanics reflect a society that has already embraced Spanish TV and election ballots in Spanish. The Hispanic population is soaring because of immigration and higher birth rates.

Black and Hispanic groups were quick to emphasize common ground rather than differences.

''They keep trying to pit the African-American community against Hispanics when indeed we have a lot more in common than we have in disagreement,'' Hilary Shelton of the NAACP says. ''The Hispanic community is made up of very many different racial groups. African-Americans are still the largest racial minority group.''

That's true because the government considers Hispanic an ethnic classification, which means Hispanics can be black, white, Asian or any race. There are 1.7 million blacks who identified themselves as Hispanic. Add them to the black population column, and blacks total more than 38 million.

How they're changing America

The steady surge of Hispanics has changed the fabric of life in the United States, from food on grocery shelves, movies and the bedsheets children sleep on to the rosters of professional sports teams:

* Nickelodeon's bilingual Dora the Explorer is the No. 2 pre-school show on commercial TV, leading Anglo as well as Hispanic tykes to sleep on Dora sheets that say Buenos noches. A fraction of the audience for George Lopez, one of ABC's top comedies last season, is Hispanic. And Fox, already the top major network among Hispanics, is adding two Hispanic family comedies this fall.

* Hispanics represent 15% of movie-ticket sales, higher than their share of the population. The box-office careers of Cameron Diaz (Charlie's Angels), actress-singer Jennifer Lopez (Maid in Manhattan) and director Robert Rodriguez (Spy Kids) are evidence of Hispanics' broadening appeal. The 2002 Academy Awards celebrated the year of the Hispanic, after Latin artists and Hispanic-themed work collected 10 nominations, including six for a biography of Mexican painter Frida Kahlo, played by Salma Hayek, a Mexican.

* Latin radio stations account for 7%-8% of the radio audience, up from 5% five years ago, according to Airplay Monitor editor Sean Ross. More stations are sprouting in places outside Florida, Texas, California and New York. There's a Latin FM station in Raleigh, N.C.

* The Latin explosion in mainstream pop music is evident in the success of Ricky Martin and Marc Anthony, who began their careers as Spanish-language singers. Colombian singer-songwriter Shakira and Jennifer Lopez are multi-platinum sellers.

* Time Inc. launched People en Espanol in 1997. Circulation has since doubled to 414,000 to make it the top-selling Spanish-language magazine in the USA.

* Hispanics are starring in sports they had never been associated with before. The National Hockey League has its first Hispanic, Scott Gomez of Alaska, rookie of the year three years ago. Last year, speedskaters Derek Parra and Jennifer Rodriguez became the first Hispanics to win Winter Olympic medals. Parra is Mexican-American, and Rodriguez is Cuban-American.

Hispanics are also the largest minority in Major League Baseball. Alex Rodriguez, a Dominican-American born in New York and raised in Miami, is the game's highest paid player at $25 million a year. Arturo Moreno became the first Hispanic owner of a team when he recently bought the Anaheim Angels. Moreno has said he doesn't want to be thought of as a minority owner. When asked a question in Spanish at a news conference, the fourth-generation American answered in English. ''The first thing is I'm an American,'' he said. ''I'm proud to be a Mexican-American, but as far as being the first minority, I think most of us are immigrants from some place.''

* The National Basketball Association this past season became the first major U.S. sports league to offer national TV coverage on Spanish-language stations. Later this year, ESPN will launch a full-time sports channel in Spanish. Next year, for the 2004 Summer Games, NBC will carry 134 hours of Olympic coverage in Spanish on its Telemundo network.

Tensions arise

Despite efforts by both political parties to reach out to Hispanics, the surge in their numbers creates clashes between blacks and Hispanics, Anglos and Hispanics and Asians and Hispanics. Because so many Hispanics are newcomers, there are disputes over jobs, political power, schools and lifestyle.

''It can be very destroying to think of this in horse-race terms,'' says Roberto Suro, who directs the Pew Hispanic Center, a think tank at the University of Southern California. ''The milestone here is not the relationship between (blacks and Hispanics), but the way the U.S. population is changing. . . . It's an official affirmation of a different era.''

The recent influx of Hispanic immigrants to North Carolina caused friction in cities such as Durham, says Jennifer Nevin, 28, a recent Duke University graduate. A battle broke out there between longtime residents and Hispanics over funding of school programs in English as a second language.

In border states such as California, Arizona and Texas, many people are upset about the flow of illegal immigrants. Similar sentiments are expressed elsewhere.

''I'm not against Hispanics -- just the illegals,'' says Bob Gillingham, 66, a retired printer who enjoys living in an ethnically diverse neighborhood in Arlington, Va. He resents undocumented immigrants using public services such as health care. ''Why don't we just make Mexico the 51st state?''

It's not surprising to the NAACP's Shelton that the Census Bureau marked this seminal moment by announcing the latest numbers at a convention of the League of the United Latin American Citizens. ''It's quite transparent that the Bush administration is courting the Hispanic vote,'' he says.

So have most national candidates. Both political parties are competing fiercely for Hispanic voters, who made up 7% of the electorate in 2000, according to exit polls. Republican strategists believe Bush, who won 35% of the Hispanic vote that year, can't lose if he gets 40% in 2004.

Tactics used by both Democrats and Republicans range from Web sites in Spanish to setting up booths at citizenship ceremonies to register voters on the spot.

New Mexico Gov. Bill Richardson is the first Hispanic governor since 1986.

On Capitol Hill, there are 23 Hispanics in the U.S. House of Representatives -- 19 are Democrats, and four are Republicans. There are no Hispanics in the Senate.

Republicans recently began Spanish lessons for members of the House and the Senate. Democrats have been studying Spanish for some time. ''The launch of Spanish on the Hill shows we are serious about working with Spanish-speaking America,'' says Rep. Jerry Weller, R-Ill., who organized the classes.

National candidates may be going after Hispanic voters, but Hispanics remain a small constituency despite their huge numbers.

''They are not yet a voting bloc,'' says Jeffrey Passel, demographer at the Urban Institute in Washington. He points out that many can't vote. One of seven Hispanics is in the USA illegally, and others can't vote because they're not yet naturalized citizens. Also, Passel says, many Hispanics born here are too young to vote.

There may be more Hispanics than blacks, but there are still twice as many black voters as Hispanic ones. According to Suro of the Pew Hispanic Center: 5% of non-Hispanic blacks were not citizens in 2000, compared with 39% of Hispanics.

Beyond that, Hispanics are not a homogeneous group -- politically or culturally. Many see themselves as having separate and distinct cultures based on their countries of origin. Cubans in Miami are largely conservative and Republican. Mexicans in Los Angeles and Puerto Ricans in New York, on the other hand, are more liberal on many issues and largely Democrats.

''Blacks on an average vote Democratic 85%; for Hispanics it's 70%,'' says Ronald Walters, political science professor at the University of Maryland. ''But there are some themes that run through the (Hispanic) group, such as immigrant issues, social services, bilingual education, employment.''

Growing market

It's not easy to appeal to Hispanics with one message, whether offering politics, music or frozen foods. Hispanic cuisine differs markedly from region to region and country to country. Many Hispanics who were born in this country don't speak Spanish or listen to Spanish-language media.

''Consumers don't think or act a certain way based on the color of their skin as much as their household income, age and gender,'' says Christopher Kelley, author of a recent study by the Forrester research company.

The growth of Hispanics has sparked a surge in entrepreneurship and in the number of companies owned by Hispanics in the USA. There are more than 1.1 million such companies, four times the number two decades ago.

That number displaces African-Americans as owners of the most minority-owned companies.

Hispanics now own one of every 20 U.S. companies, the latest Census data show.

More of them are becoming big businesses. Nearly 27,000 have annual revenue of $1 million or more, which puts them in the corporate elite. They include giants such as MasTec, a telecommunications services company based in Miami. MasTec has about 10,000 employees in the USA and Brazil, and it boasts more than $800 million in annual revenue.

Demographer Passel estimates that in the next half-century, there will be twice as many Hispanics as blacks in the nation. But the rate of intermarriage is climbing among all racial and ethnic groups.

''In 50 years, we'll probably be using different categories to classify the U.S. population,'' Passel says. ''The boundaries are going to become much fuzzier. . . . We don't know in that sense what it'll mean to be Hispanic in 50 years.'