With respect to "are gay people really more stylish," yes and no. Gay people have a common set of life experiences growing up as outsiders. It's my observation that marginalized groups tend to be more creative overall, which is why you don't see too many rich white straight guys contributing much to the creative arts. Of course you're going to have gay people who can't dress to save their lives, but keep in mind that gay men aren't all white, hairless, urban professional gym queens who like house music and party drugs. We're construction workers, firemen, office workers, janitors, teachers, factory workers, waiters, republican senators, and anything else you can think of; being queer cuts across racial and economic lines.
Your gay friends think they're the shit and that everyone wants to fuck them? Well, they sound just like the ugly-ass straight guys who automatically assume that I want to fuck them the minute they find out I'm gay and think that lesbian couples want to have threesomes with them.
Do we feel superior? I personally think that the average gay person usually has a lot more shit to deal with than your average straight person does. And if you're willing to risk getting kicked out of your house, losing your friends, and getting beat up in the street to be honest about who you are then you're cool with me.
"Gay" is OK to use when you're using it in the right context. "Oh my god, the Castro is so gay" yes, "Oh my god, this snack machine is so gay" no.
Not too enthused with will and grace.