I know that in Japan the word otaku is designated with negative stereotypes but over State-side, it's a much more endearing term (of course that's a blanket statement, there are the select others who still deem otaku with its negative nature).
That aside, I personally think the word just means a fan of Japanese media and the culture itself. I know it can apply to other places like being a "train otaku" but I'd rather much call someone a fan of something non-Japanese just a fan of whatever that may be. Since otaku is from the Japanese language, I just naturally apply to to Japanese-related things.
I consider myself an otaku. Am I proud of it? Of course, I don't hide the fact I am one nor do I see the need to repress it from anyone. Now, if there are people who don't really know the term (I'll just call them "normies" for the sake of easy labeling) and I explain to them what an otaku is, they tend to think it's a negative thing. I go on further to say how there are degrees of otaku, much like degrees of fans. I normally compare otaku to sports fans. There's the hardcore people who buy season tickets, be half-naked and paint themselves their sports teams' color(s) and then there's the casual fan who just watches a game or two on television. The normies tend to understand what I say to them after giving an example they can relate to; they become more accepting with the term (albeit they'll probably forgot the actual word otaku but still) and they see it can be normal.
Even if normies still thought otaku has negative connotations, I'll still consider myself an otaku. There may be people I'll want to *face-palm* (especially at cons...) but there's the rational ones that make me happy to consider myself as one. I don't particularly care if I'm labeled one and designated to those negative stereotypes because people will always be judgemental.
There's another question-- what do you guys call non-otaku/non-geeks? I'm familiar with "normies" (probably made most famous on Family Guy), and then there are two variations on "mundane." I have one friend who refers to non-geeks as 'danes (not my favorite choice since Danes are actually dogs as well as people from Denmark), and my personal favorite is "mundies" (taken from the comic book Fables). <3