To be honest, at this point we are trying not to tiptoe so much around the word, since as I've said, it's in the dang name of DD's school. I may wish it wasn't, but it is.
So now, when DD, say, absent-mindedly tries to screw the cap on something the wrong way, I might say, "All righty then, gifted child" and she'll roll her eyes, and we both laugh.
Also, as someone else said, it did help her sort of understand why she felt different. I have heard more than once that some children actually do believe they are stupid, or very strange, due to not understanding why they aren't so similar to other children they spend time with. You don't have to use the term "gifted" to have that conversation...but it's a shortcut. Also, some kids really need to be told that it's normal for other kids their age not to be able to (XYZ) yet and they shouldn't remark on it in noisy amazement. (Uh, that would be MY children.)