Hi, djs, and welcome aBoard. Good to have another Brit (or at least British-residency) here!
How could niggardly be offensive? Because some peoples' brains focus on the first two syllables to the extent that they don't "hear" the d, and even if they do hear the d, they probably don't know what the word means. Perhaps the offensive "n-word" was a lot more widespread here than it was there.
A high school teacher in our area was fired recently for using that word while addressing a student. I don't know from personal experience, but the newspaper reports made it sound as though the (white) teacher felt that he had a good enough relationship with the (black) student that he was in effect saying, "I know you know me well enough to understand that I'm not insulting you". And that may have been true; I don't know. But the kid's mother, and other people, got all up in arms about it. So it's still a "hot topic" here. He was an English teacher, too...
