Am I living in a Fantasy world?

I've re-written this post about five times, lets hope maybe it's finally come out right.  I know it's a little long, but please read it - I badly need some advice.

The other night I was out at a local brewery with a group of grad students from the station here, at a reception for this week's visiting seminar speaker.  At one point during the evening, the conversation turned towards a particular institution's graduate program, a premier program which usually admits a very high-powered, small, and highly selective group of students each year.  Someone proceeded to express a set of very strong negative opinions about the program's students, noting that good GPAs, recommendation letters, and GRE scores only meant that they were "book-smart" students.  Said individual had gone to a much less renowned program in a different part of the country, identified as anything but a book-smart student, and yet has done some stellar research work, and has the publication record to prove it.

To boil down my take on the matter, (this is nothing revolutionary), "book smart" is a stereotype.   We're all familiar with the general way of things - stereotypes are generalizations about a group of people, based on experiences drawn from a set of case examples demonstrating a pattern.  Often stereotypes can actually point out things that aren't good about a particular group, or the way that they do something, or the privileges that they receive.  As with any generalization, there are exceptions (often many exceptions) to the generalized rule.  

"Book smart", being a stereotype, fits all of this.  Without going into this a whole lot, because there's another part of it that is more on my mind right now, I'll be the first to admit that "book smart" people can be arrogant about their perceived "intelligence", and that often they are afforded opportunities (graduate school, jobs, scholarships, etc., etc. etc.) that other people with other skills are equally deserving of, and could perform at just as well.  So many people seem to want the skill, and dislike those that have it with degrees ranging from mild rancor to hate.

What's really on my mind right now is how to respond to a stereotype when you're in the group that it refers to.  This is where it gets kind of personal.  By pretty much any standards, line up the credentials and I'm "book smart".  I can't help it.  It's who I am, it's my nature, it's who I was taught and raised to be.  I can't help it.

So what are we supposed to do?  What are the options when someone dislikes you for who you are?  Retreat into your books, which can't hate you, lose touch with the world and place your trust in the fact that jabs you aren't aware of can't hurt you?  Take the offensive, develop a thick protective coat of arrogance, and surround yourself with a similar group of "elites" to weather the raging?  Either response simply serves to reinforce the stereotype that engendered it.  Accusations of arrogance, elitism, and feigned superiority hit their mark, targeting both the people for whom this stereotype is unapologetically accurate, and those who are driven into adopting such a protective persona.  And even talking (or writing on a blog) about the subject is often enough to get you classified as arrogant.  

I am acutely aware of this stereotype, and where I fall with regards to it.  I can't stand arrogance, and nine times out of ten I wish I could wave a magic wand and change things so I wouldn't stick out.  It makes me feel isolated from other people, even people that are really close to me, not because I choose to be isolated but because they choose to set me apart.  Put my picture on the wall.  Hang meaningless things around my neck.  Put me up on a pedestal, and then dislike me because I'm there, and decide that I can't understand who they are and the path that they walk, because of where I've been put.

So how do I deal with it?  I don't know that I've got the best solution.  I think so far I've managed to avoid completely sinking myself into my studies, letting myself get pigeon-holed, and losing touch (although I can always feel this tugging at me.  it's so tempting sometimes to slide into that - comparatively - safe world.)  I'd like to think that I've avoided the arrogance armor, although this is a continual source of self doubt.  I even avoided applying to some good grad programs because I was afraid of the arrogance bug.  But I don't know that my hands are clean even so (maybe just mentioning it or thinking about it this way is tantamount to exhibiting it).

The path of recourse I've been taking so far involves clinging with a good degree of desperation to the belief that anyone could be where I am, given different past opportunities or present motivations.  That if they believe in themselves enough, and approach the world with enough tenacity, they can take what they want from it.  And that hopefully, if I can work hard enough to be a source of encouragement for other people, a teacher, a mentor, a friend, I can somehow assuage the guilt that I feel for being who I am.  That if I deny my skills hard enough, swear them off as nothing and unimportant, maybe they will go away or become irrelevant and stop serving as a painful source of separation.

So you tell me readers, I really want to hear your thoughts.  Do I live in a fantasy world?  Am I clinging so hard to this optimistic belief (perhaps for my own selfish reasons) that I do more harm then good by believing in people?  When do you start causing harm by refusing to accept that something is impossible, that someone can't change their life and their prospects, that somethings can't be overcome and only lived with?

Perhaps more selfishly, if I were to stop denying that differences meant anything at all, how do I live with myself, and the realization that the part of me that is so detested, the "book smart" part is actually an inseparable part of me, rather than just a position that I find myself in by good (cursed?) fortune?  That it's not my luck that's disliked, but actually me?  What's left to do then... suck it up, let it hurt, come down to earth alone?  run away to the books?  Cut my ties, go over to the dark side of the force and put on black arrogance armor?

Am I going about this all wrong?  HELP!!!

A speaker I once heard talk about diversity from a racial perspective said that what was important was not to get to the point where we are all blind to racial differences and ignore them, but to get to the point where we could recognize them, celebrate them, and live together enriched by them instead of using them to alienate ourselves.  Maybe I've been approaching this all with the attitude of blindness.  But I don't know how to recognize and celebrate these differences without feeling convicted by society, and hence myself, as an arrogant, ungrateful, pompous jerk.  This is too big for me, I don't know what to do.

Please please please tell me what you think.