[WOSG]

ah that is indeed derogatory ... he shouldnt have called him an old English term connoting a stick-used-for-kindling. Very insulting. (I have no idea why it became the derogatory term for homosexual though; queer used to be a derogatory term, until the (ahem) queers started calling themselves that. Funny how that naming stuff goes. )

[Texas Federalist]

Homer Simpson on gays: They're embarrassing me. They're embarrassing America. They turned the Navy into a floating joke. They ruined all our best names like Bruce, and Lance, and Julian. Those were the toughest names we had! Now they're just, uh...
John: Queer?
Homer: Yeah, and that's another thing! I resent you people using that word. That's our word for making fun of you! We need it!!

[fiscally_right]

The popular opinion is that 'faggot' is used for gays because the nazis burned them like 'faggots.' That probably isn't where it actually came from, but I've heard that from multiple people.