A popular misconception is Hinduism is polytheistic - believes in multiple Gods.
God is Infinite. The Infinite can be represented in Infinite ways and does manifest in infinite ways. This, in short, is the essence of the Hindu belief in God. That He is everywhere, around us and within us. God being infinite, takes up many forms, at different periods of time, to help us and we worship those many forms of the SAME god, hence, god is only one, it is his forms that are many, and which we worship. Infact, Hinduism takes the bold step of proclaiming that "we all are a part and parcel of God". He is within each one of us.
At the end of the day, Hinduism is monotheistic (Believes in One God). However, Hinduism believes not only in One God, but also in His Infinite manifestations around us and within us perpetually. Realizing that it is impossible for mankind to visualize the Infinite, Hinduism presents us with His forms to help us visualize him. This belief of Hinduism is often confused with polytheism.
To illustrate this point - We all observe the unending processes of birth, existence and death, which seem to be continually taking place around us. We constantly witness these processes and are yet ignorant of them, living as we do in the comfort of our illusory lives. Hinduism gives form and shape to these "works" of the Infinite with the Hindu Trinity - Brahma, Vishnu, and Shiva. "Brahma" creates, "Vishnu" sustains, and "Shiva" destroys or consumates everything in the Universe.
That the Supreme can be worshipped in any form is a concept unique to Hinduism. Such worship is truly a tribute to His greatness.
Another popular misconception is that Hinduism promotes idol worship.
Hinduism does not promote idol worship. To the contrary, Hinduism urges us to transcend all physical aids to worship, in our spiritual progress. Realizing that it is impossible for the mortal human to visualize the Infinite and instead of sustaining false hopes of such achievements, the religion urges us to slowly and steadily continue our progress in pursuit of the Truth. For such steady progess, the religion asks us to start with physical aids such as temples and idols, and through practice and devotion, ultimately succeed in visualizing God without the aid of temples and idols.
We are asked not to worship idols, but worship God in the form of idols. This is done to facilitate contemplation of the Infinite with our finite capabilities. To quote none other than the great intellectual, Swami Vivekananda on this matter - "If a person wants to drink milk, he uses a cup as he cannot drink it directly. For the quivering and unsteady mind, there should be a visible form or a symbol, the idol, so that it becomes a foundation for his adoration. The idol form of God is akin to a vessel which enables a man to drink the milk. Through the instrumentality of an idol, a devotee comprehends divinity."
Hinduism promotes stratification of society under the "caste system" and encourages discrimination against the less fortunate.
The caste system, originally described in the Vedas, but much abused and maligned over the years, is nothing but a representation of an efficient human society. The four castes described in the scriptures are - the Brahmins, the Kshatriyas, the Vaishyas, and the Shudras. According to the Vedas, an efficient human society is based on the strength of its educational/knowledge-pursuit system (Brahmin), its military and defense system (Kshatriya), its economical and business system (Vaishya), and a strong, happy, productive workforce (Shudras).
This noble representation was misinterpreted, exploited, and abused by a few in the Indian society, leading to the indiscriminate creation of thousands of castes and sub-castes, including the so-called "upper" castes. Fortunately, the caste system has been more or less abolished since Indian independence and the distinctions are beginning to disappear and there is a significant change atleast with the educated and young.