As someone who is disabled and when I was younger was called retarded, I want to be called disabled. For one, people have a particular way of saying retarded that's very insulting. I was okay with the traditional term at the time, handicapped. That describes things in a far less insulting fashion.

People tended to use retarded as referring to one's mental abilities and assumed that if you have a physical disability, you have a mental one. That was the biggest problem with retarded.