Thought he was Black.

Billy Pilgrim is not based on Kurt, loosely or otherwise. He states this very clearly in an interview at the end of the Slaughterhouse Five audiobook (I'm sure he's said it in other places, too, but I know he said it there). Billy Pilgrim is actually based on one of Vonnegut's fellow soldiers.

I found it here with a quick look at google:
http://books.google.com/books?id=ZTCmeRrHvRsC&pg=RA2-PA185&lpg=RA2-PA185&dq=billy+pilgrim+slaughterhouse&source=bl&ots=XRN4P7vOht&sig=ZSYm_b7X7TVUHAAr5W5uBHSAcYs&hl=en&ei=DazOSeDELJnulQfRuKjxCQ&sa=X&oi=book_result&resnum=2&ct=result#PRA2-PA185,M1

"The act of surrender deeply affected many men, eating away at already fragile psyches. Private Joseph Crone, one of Kurt Vonnegut's fellow POWs from the 106th Division, was one of many who gave up hope and plunged into apathy and then lethal lassitude. Vonnegut's fictional hero in Slaughterhouse Five, Billy Pilgrim, was based on Crone, who allowed himself to starve to death. "He simply sat down on the floor with his back to the wall," recalled Vonnegut. "He wouldn't talk, wouldn't eat, wouldn't do anything, and then died."

Billy Pilgrim is not black nor is he based on Kurt Vonnegut Jr. The U.S. Armed Forces was racially segregated until 1948 so if Billy was black the other soldiers/POW’s in the book would also have been black & they weren’t. In fact one of them Paul Lazzaro is a psycho American Italian who shoots & kills Billy years later.

Billy is not based on Kurt Vonnegut Jr. Billy as already stated is based on Private Joseph Crone but Kilgore Trout is the author's alter-ego, a mediocre and not very well-known science fiction writer. Billy is first introduced to his books by Eliot Rosewater, his bed-neighbour in the mental hospital he has checked himself into in his last year of optometry school. Rosewater is an avid fan of Trout's, and writes him unintelligible letters saying he should be the President of the World. Billy ran into Trout, who was bossing around the newspaper boys who work for him, in an alley and brings him to his eighteenth wedding anniversary, where the guests are all impressed that he is a real writer. The story of abduction in one of Trout's books suspiciously closely resembles what Billy insists happened to him on Tralfamadore.