Ah! Political correctness ... and all its ironies. When I was younger, I'd get outraged at some of this nonsense. In my grandmother's day, to have an outlaw or American Indian blood in the family was a shame and kept secret. But attitudes change, as well as word usage.
Gay. Totally different word, and sadly I can't think of a good replacement for the former. As for "Mindy Kay" and her attempt to change the meaning of the word squaw - get a grip (HCN, 4/23/01: Heard around the West)!
We have squaw peaks all over the West. They are "breast" shaped as named by lonely men who, in those days, were turned on by the display of a feminine ankle. As crude as the men (mountain and military) were, they were much more respectful of all women than the typical rapper or stand-up comedian of today.
Squaw was a female Indian, period, or else we have a problem with basic anatomy. As for Mindy Kay, well, I once met a lady who saw airplanes as phallic symbols. But that's another story.