Is it insulting or is it funny?

I think it's funny.

Best Indiana Jones gay joke (is it really a gay joke though?) from the SF Metblog:

The Castro Theatre is showing Indiana Jones and the Kingdom of the Crystal Skull!
No, not that kind of crystal.

The clever Mark Pritchard continues:

Judging from the widely-disseminated publicity photo (left), the film “Indiana Jones and the Kingdom of the Crystal Skull” has something to do with a rugged older man initiating a pretty young boy in a leather jacket into the mysteries of a deep, dark hole, making it perfect for the Castro.