Hmm. On one hand, the DM has no right to mistreat his players. The DM is just a guy hanging out with his friends, and his DM hat doesn't give him magical powers outside of running the game. On the other, given the choice between mistreating a female player who's doing nothing obnoxious (other than ruining guy-time by not laughing at jokes about rape or whatever...), and "mistreating" a male player who resents girl-cooties ruining his game, I know who I'm going to treat poorly. If I can't handle it amicably, then as far as I'm concerned the guy has forced the issue on me. Someone is going to get treated in a way they don't like, and its going to be the one creating the problem.
I don't know that my response speaks to Gailbraithe's specific situation. He needs to balance his desire to keep gaming with his group and his desire not to endure his obnoxious player's behavior, and I can't tell him how to do that. I just know what my response would be to a player who makes racist and sexist comments while cheating.