The way I see it, all those derogatory names are family names -- that is, you can use them if you're part of the group, in a derogatory or teasing fashion. But not outside.
Once I worked on a job where the receptionist was black and really, really, hot, and a really together person besides. We dated a little. Anyway, she hated exercise and I dared her to go on a run around on the block with me, and she said, "Only if you don't mind having a dead nigger on your hands." She got to use it, and I'm glad she felt I was friend enough to use it with me. But I'd never use it, and I don't think she'd understand -- unless we'd started a relationship or something.
My relatives on one side are Portuguese, and they're always calling each other "Dumb Portagees." If someone not Portuguese or a friend called them that, though, they _really_ wouldn't like it.
Same with names like "trailer trash" or "poor white trash." I think Anglos can use them, because they're names for their own race.
In short: in practice, only the ethnic groups that those derogatory names describe can use those names, or people who they know very well. Otherwise, could be fightin' words.
la petite moi's sister is doing what she's doing because she's just doin' it with her friends. But eventually somebody's going to call her on it. I don't think there's any other way to get her to stop -- in public, anyway -- until she has a bad experience. And eventually, she will.
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