Before you thwap me, please note that I put the title in quotes. That isn't something I would say about anything, ever, but I hear it so often in schools, walking around town or the mall, and even on TV shows. And I absolutely hate it every time I hear it.
"Retarded." Definition: slow. A hindrance. A person characterized by retardation.
"Retardation": Definition: slowness in cognitive ability, understanding and awareness, development, academic ability, etc.
So when you say, "This assignment is so retarded", you're calling the assignment slow? Really?
Take another look at the definition of retarded. Notice a specific word in it. Person.
I have a thirteen-year-old daughter who is on the autism spectrum. She is very intelligent, but her social skills are lower than those of most kids her age. That's her disability. Throughout elementary school, particularly from third through fifth grade, she was often called "retard" by other kids. She knows all too well how much that word hurts.
People seem to think that it's okay to use "retard" to refer to people as long as they aren't actually retarded. For example, "Jack's driving drunk again, that retard!" They think it's okay to call inanimate objects or other people "retarded" as long as it isn't a person who has mental retardation or other disabilities.
IT IS NOT OKAY!
Words hurt, and it doesn't matter your intention in using them. My thirteen-year-old becomes upset whenever she hears someone or something being called "retard" or "retarded", to the point that she actually stopped speaking to her stepfather for an entire day because he used the word. My sixteen-year-old, who is very protective of her sister, ended a couple friendships in middle school because her friends wouldn't stop using the words "retarded" and "gay" (which is a whole other blog post) as insults. Now that she's in high school, my sixteen-year-old takes part every year in the "Spread the Word to End the Word" rally at her school, which is a rally to encourage people not to use "retard(ed)" as an insult.
Stop and think about what you're saying and who it might hurt. If you're an author, think about what your characters are saying. As I said, words hurt.