I am not surprised by the confusion. The ascendancy of Inuit culture, through good reportage and the establishment of Nuvavut, has conditioned southern folks to say "Inuit" instead of "Eskimo."
Southerners have complied beautifully, but at last they are running up against peoples, related to Inuit, who insist that they are Eskimos. The confusion derives from this sticky fact: Inuit are not Eskimos, and Eskimos are not Inuit.
The primary reason that Eskimo is considered derogatory is the arguable perception that it means "eaters of raw meat." There are two different etymologies in scientific literature for the term Eskimo. The most well-known comes from Ives Goddard at the Smithsonian Institution, who says it means "Snowshoe netters." Quebec linguist Jose Mailhot, who speaks Innu-aimun (Montagnais) (which Mailhot and Goddard agree is the language from which the word originated), published a definitive study in 1978 stating that it means "people who speak a different language."
Since the 1970s in Canada and Greenland Eskimo has widely been considered offensive, owing to folklore and derogatory usage. In 1977 The Inuit Circumpolar Conference meeting in Barrow, Alaska, officially adopted Inuit as a designation for all circumpolar native peoples, regardless of their local view on an appropriate term. As a result the Canadian government usage has replaced the (locally) defunct term Eskimo with Inuit. The preferred term in Canada's Central Arctic is Inuinnaq, and in the eastern Canadian Arctic Inuit.