http://news.bbc.co.uk/1/hi/entertainment/5049566.stm
So, according to the BBC, it means 'lame' or 'rubbish', and doesn't convey homophobia.
I think it does, personally.
Having said that, 'gay' was subverted from 'carefree/happy' to 'homosexual'... well, it's appropriate it should evolve to mean something else...