I am gay.
I'm really not offended by the word "faggot". I don't think it's particularly prevalent and is pretty outraged in itself.
The line in Fairytale of New York uses the word in its Irish context. In Ireland a faggot is a lazy, slobbish person. Context is everything, and I don't think it needs to be removed. I haven't met a gay man in real life who disagrees.
I find ponce much more offensive. Ponce is absolutely a homophobic slur, and is relatively widely-used. I'm not sure how you haven't heard it before. It's to indicate someone who is limp-wristed, and a bit soft and up themselves. Picture a man who works in a department store.
I think the original poster was mixing up ponce with n. A n is a pedalo.
I suppose we all have different views. I detest "queer".