Just for the record, I don't think I'm particularly PC, I offer people black tea (rather than tea without milk), talk about a blackboard or whiteboard, and I might even mention 'brainstorming' (PC people say you should say 'thought shower' rather than brainstorm as brainstorm might hint at mental illness). I refer to people as black or Irish or Jewish or whatever.
HOWEVER, I don't like the use of 'handicapped' for various reasons. Clearly the original derivation reason is a red herring, although it was what I had previously been told, but it DOES still have the connotation of kids who are locked away in a special school or whatever. I have a fairly mild physical disability with one of my arms, no big deal at all, but I prefer the concept of 'disabled' as it describes me (not entirely able to do things with that arm) rather than giving the impression that I shouldn't be working at all, which to me the term 'handicapped' can in some cases. I am happy to use the term 'handicapped' for golf or horse racing because that's the term and it doesn't have negative connotations in that area.
I do, think, though if I had a friend or acquaintance who really hated, for example, attention being drawn to the fact that they were overweight, that I wouldn't make fattist jokes at them. If they found those kind of jokes really funny and laughed along (and genuinely appeared OK with them, not just covering up) then I could feel comfortable about making those jokes (as long as they didn't turn them back on me!)
Someone above asked whether we should modify what we say for every random person of our acquaintance? Of course that isn't practicable, but if you meet for the first time someone who is black or from another ethnic minority, disabled, whatever, it's probably a sensible plan to avoid making too many dodgy comments until you've got their measure. And if they say that they don't mind or do mind you using a specific word or phrase, it's good manners to try to accommodate that as much as you can.
But that's just my opinion and, hey, what do others' opinions matter in the great scheme of things?
