If you're not American, you'll probably understand when I say it carries the same weight as "spaz".

It's not on the same level, but it is considered a mean, insensitive word. When I was a kid (70's - 80's), it was used occasionally, but not that much. Advocates for the mentally retarded became vocal about the use of the word, and, for lack of a better term, it has since been considered politically incorrect. Since that time, I've noticed that usage of the word "retard" has gone way up. Same for the word "gay". Such is human nature.

Have noticed it (opposition to the word "retard" in that context) in Australia as well.