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Got this from http://allaboutfrogs.org/weird/general/myths.html

The French and the Frogs
For some reason, the French have been given the nickname Frogs...There are many different theories about how this came to be...

The story I had always heard was that the nickname dates waaay back to sometime around the 18th century, when Paris was surrounded by many swamps...The French nobility that would visit Versailles apparently tended to refer to Parisians as frogs because of the swampy surroundings...and only later did the term get picked up to describe the French in general.

Another story I've heard was that American soldiers adopted the nickname for the French during the World War II because they ate frog legs and hid well when camouflaged.

I've also heard that a frog used to be on the French Flag, before the Fleurs de Lis was adopted when King Clovis took the throne....

In fact, there are so many stories....I don't think anyone really knows for sure...

It seems to be a general term of abuse for anyone, not specifically French but the connection with eating frogs has sort of cemented that meaning. The Oxford English Dictionary gives, in part: b. = froggy n. 2. Also, the French language. Also attrib. or as adj. 1778 F. Burney Evelina I. xiv. 79 Hark you, Mrs. Frog..you may lie in the mud till some of your Monsieurs come to help you out of it. 1845 F. A. Kemble Let. 15 Dec. in Rec. Later Life (1882) III. 110 Surely I shall always be able, go where I will, among frogs or maccaronis, to procure sucre noir, or inchiostro nero. 1914 R. Brooke Let. July (1968) 601 Could we go on Friday to the Frog-Art show at Grosvenor House? From the First Frog to Czanne. 1932 J. Dos Passos Nineteen Nineteen 55 Even the dogs looked like frog dogs. 1938 S. V. Bent Thirteen OClock 234 But thered be the nuisance of learning frog-talk and the passage there and back. 1955 W. Faulkner Fable 333 Ask him... You can speak Frog. 1962 I. Murdoch Unofficial Rose viii. 84 Not that I want you to marry a frog, but she sounded quite a nice girl. 1970 Private Eye 27 Mar. 16, I dunno about the no hard feelings bitfrom what I hear about them frog sheilahs!�