The word doesn't seem to have the came cultural baggage in the US as it does in the UK.
Note to Americans, to British eyes XBoxWarrior's sentence was culturally equivalent to saying that Osama was living in some "N_____ cave"
Off topic but that is something that has always puzzled me.
In Australia Kooris get insulted if you call them Abos. Paki is an insult.
But these are just contractions.
It should follow if Abo and Paki are offensie then Aborigine and Pakistani would be equally offensive. But they are not. A lot of people I grew up with in Australia were completely puzzled the first time and Aboriginal took them to task for calling them an Abo. "We call ourselves Aussies, a contraction of Australians, whats the difference?" was the most common response.
Especially in Australia where contracting names is so common that my parents made sure all their kids had first names with only one syllable.
Why? Because any name with more than one will be cut down to one and have an o or a added to the end. First and last names.
Robert, Roberts or Robertson? Congratulations, your name is now Robbo. Any variation of David? Davo. Anything starting with Mc or Mac? You are now Macca.
Funnily enough New Zealanders never minded us calling them Kiwis as much as Aboriginals and Pakistanis get bent out of shape over legitimite contractions.\
As an aside to the aside the theory I always subscribed to over the shortening of names was simple. The less syllables you had to say, the less time you had for flies to get in your mouth.