Example:
Spencer: "Hey Eric, do you want to go to Books-A-Million?"
Eric: "Fuck no, that's ghey, you
fucking ghey!"
As opposed to when it is used in the literal sense.
Example:
Spencer: "Hey Eric,
Raj and I are going to go have anal sex and cum all over each others' balls, do you want to join in?"
Eric: "Fuck no, that's gay, you
fucking gay!"