The fighting words doctrine (Chaplinsky) was really only used in one case and has since been pretty much abandoned.
As far as the breach of peace doctrine, the big thing is the intent to incite an immediate breach of peace. Under the current doctrine (I think its Brandenburg) advocacy of incitement is the key. So you could go around dropping N bombs wherever you want, but unless you are affirmatively urging people to incite a breach of peace, you'll be fine.
My big argument with banning words is what is known as the "heckler's veto". If people are up on stage saying something, the effect of their words could make a crowd extremely hostile. If the hostility of the crowd requires the person on stage to shut the fuck up out of fear, then the people in the crowd have regulated the speech of the speaker. I think it would be a better rule to require the people to accept what they hear and not react to the speaker, than to require the speaker to shut his mouth. That's the "American way".
Most European countries are drastically different about free speech than in America. In Europe, you can't own Nazi paraphernalia, and most types of racist/offensive speech are regulated. But I think this is a slippery slope. You never know which words are regulated or in what situation. If a bunch of black guys stand around and use racist terms, its okay, but if a white guy says it to some black guys, it could really piss off the crowd. We'd have to deal with the law on a case-by-case basis and we'd never have any hard and fast rules. I prefer a society where people can say what they want and the crowd has to deal with it, as opposed to a society where a paternalistic government regulates your speech before you say it.
In a lot of ways, speech isn't effective just because of its content; the specific words used have some type of value. Just as there is more emphasis in saying "fuck you" than there is in saying "i disagree with your opinion", I think people should have the right to express themselves in whatever way possible. Then again, most racist speech has no inherent value or content and is more like pornography. The problem is, like pornography, its very hard to define.
This reminds me a lot of Skokie, when the court held that Nazi's could put on a demonstration in a Jewish town. Free speech is free speech is free speech in my opinion.
Then again, this is coming from someone who works for the ACLU.
This is kinda scattered but its 7:30 AM and I don't feel like thinking all that hard.