Assuming CV is telling the truth, my thoughts:
1) If KG said this, it was completely out of line as far as trash talk goes. But, lets try putting this in a little context. If KG had used homophobic slurs on a metro looking dude like say Andrea Bargnani, would we be as outraged? If he had used white racial epithets on Kyle Korver, would we be as mad? No. We wouldn't. I'm not saying it makes what KG said right...I'm just saying its not really all that "different" in light of the other stuff that happens.
2) However, like I said in part 1, KG was out of line here. But, this isn't high school ball. This isn't recess. Its professional basketball..a game played by hyper aggressive, hyper competitive, emotionally stunted, vulgar, men. If you're completely devoid of body and head hair, you're going to catch a cancer patient reference once and a while. You think nobody ever called Bill Russell the N-word? You think that Eddy Curry doesn't get called fat? These guys want to win, and they'll use whatever they have to get under your skin. Moreso with a guy like KG who probably can't lose a game of Wii to his kids without screaming at a stanchion.
3) Lastly, like I said before, I think what KG said is objectively out of line, but I'm not a basketball player. But, if CV was so incredibly offended, he should've dealt with it like a man and gone right to the offending party. Stick out his leg on a KG jumper, or hard foul under the hoop. That's how you deal with it. Personally I don't give a crap how politically correct KG's trash talk is, because I know (like Jeff said before) that I'll be offended by it. I understand that. Thing is, I just watch the game, and you know what doesn't offend me? Wins.