Oh look, another one of these threads...
Look, the true puppets of the Thalmor are the Stormcloaks, who are using them to divide the Empire while it recovers its strength to conquer the rest of the Empire. Ulfric is tacitly helping the Thalmor, knows it, but doesn't care to further his own petty ambitions, and is playing upon the blatant racism of the dumb-as-bricks nords to help him out in it.
If you side with the Empire, you help the races of man unite against the Thalmor.
If you side with the Stormcloaks, you help the Thalmor conquer Tamriel some by dividing men up by race so that a less strong front can face the Thalmor.
If you don't pick a side, you let men stay divided while the Thalmor get ready to invade, and help the Thalmor greatly with your inaction.
No, you can't become High King or Emperor or kill all the Thalmor yourself, stop asking.
Yes, the Empire is in dark days, but as the Imperial enlistees say, "A united Empire is better for everybody."
As far as I can tell he's not racist at all; he invited the Dunmer to live in Windhelm, it's the Nords living there that are racist because of their bitter history with the elves.
EDIT: And people who think Ulfric is working for the Elves need to re-read the info provided; the note says that they don't want the Stormcloaks to win, they don't want anyone to win. Ulfric isn't a Thalmor agent.
I don't know how this point of view continues to prevail on the forums. Let me copy in something i posted on another thread. Addmittedly one guy decided to try and rebut much of my anolysis but to save space i'll omit both that and my reply. I start by actually posting the dossier itself.
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Then let me post the text itself:
Status: Asset (uncooperative), Dormant, Emissary Level Approval.
Description: Jarl of Winhelm, leader of Stormcloak revellion, Imperial Legion Veteran.
Background: Ulfric first came to our attention during the First war against the Empire where he was taken as a prisoner of war during the campaign for the White-Gold Tower. Under interrogatoin, we learned of his potential value (son of the Jarl of Windhelm) and he was assigned as an asset to the interrogator, who is now First Emissary Elenwen. He was made to believe information obtained during his interrogation was crucial in the capture of the Imperial city (the city had in fact fallen before he had broken), and then allowed to escape. After the war, contact was established and he has proven his worth as an asset. The so called Markarth Incident was particularly valuable from the point of view of our strategic goals in Skyrim, although it resulted in Ulfric becoming generally uncooperative to direct contact.
Operational Notes:
Direct contact remains a possibility (under extreme circumstances), but in generat the asset should be considered dormant. As long as the civil war proceeds in its current indecisive fashion, we should remain hands-off. The incident at Helgen is an example where an exception had to be made. Obviously Ulfric's death would have dramatically increased the change of an imperial victory and thus harmed our overall position in Skyrim. (Note: The conincidental intervention of the dragon at Helgen is still under scrutiny. The obvious conclusion is that whoever is behind the dragons also has an interest in the continuation of the war, but we should not assume therefore that their goals align with our own.) A stormcloak victory is also to be avoided, however, so even indirect aid to the Stormcloaks must be carefully managed.
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So:
1: Ulfric was captured during the war, he was broken and provided the Thalmor with information
2: After the war, the Thalmor made direct contact with him and he proved his worth as an operative (we can take this to mean he undertook actions for them that actively furthered their ends)
This point is particularly noteworthy as it indicates Ulfric was helping the Thalmor AFTER they had forced the Empire to ban the worship of Talos which is his whole rallying cry...hypocrit.
3; At some point he helped them out in causing an incident that dramatically helped the Thalmor position in Skyrim but caused him to get cold feet, i would imagine as a result of civilian casualties but we can't be sure.
4: The Thalmor still think that if, push came to shove, he'd co-operate with direct contact.
5: They wanted to stop his execution. We hear from Hadvir that the original plan was to take Ulfric back to Cyrodil for execution. It seems at some point the Thalmor intervened to stop the execution. It seems that, faced with the prospect of the Thalmor going over his head, Tullius decided to end things immediately rather than risk Ulfric slipping away. The fact Ulfric surrendered so meekly suggests he may well have expected the Thalmor to get him out of it, as the envoy was trying to do in the introduction.
6: They are willing to provide indirect aid to the rebels to keep things going (no doubt inserting their own third party operatives as they do so).
So there's the text and a mix of conclusions and educates guesses i can make from it.
Ulfric is a broken man that sold out his Empire, sold out his religion, sold out his people at Markarth and now has the temmerity to Murder their king and claim to be their champion.
Personally, i plan to preserve the Empire and maybe see if an Empire, served (or lead) by one of Dragon blood, can't turn back the Thalmor tide.----
As for your point on the Dunmer and Ulfric apparently being a nice chap to Dunmer.
1: He didn't invite them in, that happened at the time of the Vvardenfel erruption, long before Ulfric became Jarl of Windhelm. It was the Empire and Torygg that allowed the Elves to enter Skyrim.
2: Have you seen their conditions? Talk to the Dunmer in the Grey district for a moment, you'll find that the guards and authorities, including Ulfric don't give a flying cliffracer about their living conditions. One of the Dunmer notes that if a Nord is attacked or harrasssed, even outside the city, Ulfric will happily send out the guards. No such luck getting a response in the Grey Quater.
3: Furthermore, Ulfric confirms his indifference. When asked to come and inspect the Grey Quater, a full 25% of his city i might add, he can't find time to even walk the quater for a bit. The man may be at war but he has time to pray to Talos and dispatch guards to protect his nordic subjects, why not the Dunmer.
4: When told that the Dunmer connditions are terrible and that they don't really support his cause as a result (by his steward) his response is.
"Blasted dark elves. I don't suppose you could tell them i presently have larger concerns? Such as all of Skyrim" before telling his steward to keep an eye on dissent.
5: After the Empire takes over at the end of the civil war quest line, things are said to improve substantially.
6: Compare Windhelm to Sollitude, where Imperial influence is at its greatest and you'll see what we saw in the Imperial City: Even Altmer are able to run businesses without any apparent problem without being confined to a gheto in the corner of the city where "waste from the surrounding quaters washes down into our streets" to paraphrase one Dunmer.
It's pretty crazy how much people are willing to look the other way on Ulfric's deeds.
"He's not a racist, he just casually perpetuates brutal segregation and refuses to let other races become a major part of Skyrim society. It's only racism if he commits genocide, and he hasn't committed genocide... you know, except for that one time, but that doesn't count!"
Also, thank you for that, Teivel, I'm quoting that in all these threads from now on...