That was actually a pretty good question. I've spoken to a lot of people before but nobody has ever asked me that question, especially from someone who's into anime himself. When I got home I went online and looked up good 'ole Wikipedia.
Basically, for Japanese "Otaku refers to a fan of any particular theme, topic, or hobby." In English "it is usually used to refer to an obsessive fan of anime/manga and/or Japanese culture generally, and to a lesser extent Japanese video games."
So using that as reference I can say that this blog uses the word Otaku in it's english context: anime, manga, video games, and japanese culture enthusiast.
Being an Otaku is a hobby, sometimes a very expensive one. Well most hobbies are costly. There are collectors, cosplayers, media mongers, scanlators, fan dubbers, forum-ers, bloggers, fan club founders, fan artists, and the list goes on and on.
Typical stereo type for Otakus are glasses, unkempt hair, and low profile clothing. Which is funny because most Otakus I know aren't like that at all. Alodia Gosiengfiao, probably the most popular Otaku and Cosplayer in the Philippines even made it to FHM's Sexiest!
A few months ago I stumbled upon a blog called "Otaku Elimination Game" where they diss out blogs and bloggers for claiming to be Otaku even though they aren't. The biggest name they "Eliminated" was Danny Choo. They said he wasn't really an Otaku. *shrugs*
I love anime and I guess I'm an Otaku. I'm having trouble saying it out loud though. At the back of my mind the word still has a negative feel to it. Especially after watching Genshiken where you get to see how the Japanese Otaku Life really is and why they're looked at in a bad way. I even read in a news that there were Otaku Hunters in Akihabara. Thieves who prey on Otakus because "they have lots of cash, they're worthless, and they smells like cockroach.." Well, that's what he said in an interview as to why they only target Otakus.
So, am I proud to be an Otaku? Sure I am. I love anime so much I even postponed a date because there was an episode I didn't want to miss, so yeah. I can say I'm an Otaku and proud to be one.