Dont know if it has been brought up yet, as I am far too lazy to trawl the previous pages of circular arguing.
Here in the UK we have "gypsies", most of which fall uner the "Irish traveller" tag. Heck, if the word Gypsy is used, its pretty much certain that it refers to the Irish travellers as opposed to any other group. Its occasionally used as a mildy offensive term, but has been superceded in that role by the term "Pikey" - most certainly a derogatory term for one of Irish traveller descent. There could be a lot to say about thier identity, role in the modern UK, rights, resonsibilites, attitudes, culture etc., but thats not my issue here at all..
We also have a train wreck of a TV show called "My Big Fat Gypsy Wedding", which explores the juxtaposition in the culture of such traveller groups between traditional and modern values, and how traveller communities interact with other social groups in the UK. Its also an opportunity for people to have a right old laugh at crazy outfits, over the top expense and outlandish behaviour that they might not be familiar with is broadcast nationwide.
The network that makes the programme recently advertised a new series of it with the tagline "Bigger, Fatter, Gypsier". A charity that acts to protect Irish Travller families and thier rights in the London area objected to this - in particular the term "gypsier", which they claimed to be some kind of racial slur. BBC Radio News went and asked some traveller families, and they loved the word - after all, they self identify as "gypsies", and thought the word clearly expressed the difference between thier culture/mindset and that of other groups that make up the modern multicultural UK. The outcome of this complaint I do not know -I do not think any legal judgement has been made as of yet.
So, yea, is the term actually offensive? It seems not to offend the people it has been used to describe.