On the matter of derogatory Custom Titles, I agree with Steve.
While admittedly, the titles can be amusing, they offer nothing in the way of helping the members correct their problems. Contrary to that, they can be insulting to that particular person, and only encourage further misconduct. My personal feeling on this is that it breeds a sort of elitism. Not necessarily in the sense that those giving the titles are acting in such a manner, but that it can foster the perception from the perspective of those on the receiving end, and those whom they regard as friends. Though perhaps in a slight way, without a structured way of dolling out Custom Titles, they may only serve the purpose of dividing the forum more so than it already is.
Any benefits a derogatory Custom Title may achieve can be done without the negative repercussions through a simple Private Message.