The word gay has maintained three main functions throughout the twentieth century, namely
(adj.) Happy, jolly.
(n.) a homosexual male (and also sometimes used for a female) who is happy (gay) with thier sexual orientation.
(adj.) or (v.) to be or act gay, to do something stupid, taking the second definition as an insult, usually to a hetrosexual, especially a homophobe or one wary of homosexual men under the (might I add wrong) impression that the male wishes to bugger them.
a) "...those were gay old times...."-Mr Burns
A: "I hear that John is gay, is that true?"
B: "No, he's just a pink pretender out for the ladies..."