*shrug* Certain words, such as "the n-word" (and seriously, I flippin' hate obligatory censorship. I rarely if ever use that sort of wording, but I despise this sort of asterisking it out.), hold a connotation partially because people cling to and insist that it has a negative value - those being "targetted".
First people were handicapped. Then disabled. Then motorically challenged. Then different-abled. Then...well, I'l actually not sure what the PC version is of refering to someone with a physical handicap. Nor do I really give a crap.
The thing is - calling a guy a crip, or a gimp? Calling something lame? Saying something's retarded? Those I can all easily see as truely derogatory. Calling someone "handicapped" is currently still highly un-PC; yet a lot of users just mean it as a descriptive. Having a handicap in golf or whatever, isn't meant as an insult to the differently abled (and yes, I've heard people say the term should be changed).
By the people themselves *claiming* a term as instantly and always derogatory, it *becomes* more and more linked with a minority and a negative stereotype of it. Saying any term anyone fnds offensive is, de facto, an offensive word and should be avoided/censored is completely ridiculous. Soem words *can* be used in different meanings (such as handicapped). Some pretty muchc an't (the N-word). Does "gay" or "fag" belong inthe one category or the other? I dunno.
Gay is definitely used as a non-derogatory way of saying "practising homosexual". Fag, when refering to a person who is fysically attracted to those of the same gender and/or sex, would seem to be always meant derogatorily...and it's a diminutive term when used elsewhere, too. That doesn't, to my mind, automatically mean that every time it's used, it's being used in a manner meant to be negative towards homosexuals.
As far as I'm concerned, anything should be OK, as long as it isn't used ad hominem or in a strictly derogatory way towards said minority....But if every use *is* going to offends omeone...Well...I dunno.
I think "You fucking queer!" is a punishable offense, whereas "I had a gay old time" isn't. Clearly. "Man, I had an annoying game on CSS today. The other guy was a total respawn fag" sounds, to me, the same as "the other guy was a retard", "the other guy was a lame ass", "the other guy was a fucking n00b". They're all negative, but I'd say none of them are meant explicitly to hurt the possibly offended parties.