To me, it depends completely on the context and the nature of how the word is being used. But generally I don't agree with '->-bleeped-<-' or 'gay' being used pejoratively, it doesn't sit right with me; if it's used fondly I don't really mind, but 'in general', I frown upon it somewhat. For example, if my bud looks over at me fussing with some... I don't know, nail buffer, and calls me a ->-bleeped-<-. Well, yeah, sure, I am, but it begs the question how taking care of myself is 'gay'. There's too much of a stigma surrounding 'gayness', and the more we label things 'gay', the more people will avoid those things. I actually think the fact that painting your nails is 'so gay' is part of the reason why men generally avoid doing that sort of thing like the plague. Because it's gay, and most of them are not, therefore they don't want to be seen as gay because it isn't correct. I've known a bunch of guys who NEVER USED CONDITIONER on their hair because taking care of their hair is 'so gay' and '->-bleeped-<-gy', therefore if they do that they're being femme/gay, so instead they just have ratty ->-bleeped-<-ty hair instead! If they weren't scared of being seen as 'gay' (and can we really blame them for not wanting to be seen as gay when they aren't? We get pretty offended when people call us lesbians, don't we? Even though we have nothing against lesbos. It's just not 'us'.) it wouldn't be an issue, but it is, therefore, so long as there are 'gay' things, people will avoid them, and there will be a stigma surrounding those things and we'll keep perpetuating these cycles of repression.
The less 'gay' things there are, the more things can just be themselves and neither 'gay' nor 'straight', and people can just do them without it persuading others about their orientation. If stereotypes didn't exist and everyone was less inhibited, this wouldn't be a concern of mine, but alas. So yes. Even if someone calling me 'gay' or a '->-bleeped-<-' counts as recognition as a man, no, I don't think it's 'cool', because... Blah blah, see above.
And when it's used hurtfully, yeah, it still hurts. It makes me sad that people are so ignorant and have so much hate in their hearts. I was being driven home one day by a friend when another transfellow calls up and says, 'tell that ->-bleeped-<-got he can walk(referring to me)' I found it pretty hurtful. It's true that I'm not straight, but meant as an insult, yes, it is insulting- because of how it's being used.
It's like 'hey nubian princess' versus 'get away from me, you ->-bleeped-<-ing ->-bleeped-<-.' It may be true the girl's black, but the latter statement is pretty hurtful and horrible, isn't it?