I think cultural awareness actually increases prejudice in society. The reason for this is because it gives us another line to draw in the sand and look at. There is no reason to cause more divisiveness in society by focusing on our differences. I do wish this would stop now.
Yes, I think that cultural awareness decreases prejudice in society, because people are more likely to understand why people are doing what they are doing. Someone who is not culturally aware might not understand why people from another culture react the way that they do to a certain situation. Awareness can make actions make more sense.
We should take every opportunity to learn more about cultures, past and present. When we step out of our own worldview and learn about others, with an open mind. It becomes impossible to ignore the astounding similarities that all humans on the planet share. By learning how other cultures see the world, we really learn more about ourselves. This erases the fear of "the other" and the unknown, and replaces it with understanding and respect.
I believe cultural awareness decreased prejudice in society. When a person comes to understand cultural influences and is more knowledgeable about their peers then they are far less likely to be prejudice to that society. Many of us don't try to understand people with disagree with and in the long run, that is harmful.