I second Beautiful Thing, Shelter is pretty OK too.
I'm feeling lazy, so here is some copy-paste from a blog I wrote on another site:
"As the title says, this entry will address gay movies, mostly because it's a question I hear a lot from other gay people. Do you know any good gay movies? I love going to the cinema, and I'm fortunate enough to live in a city which has a gay film festival annually in the summer, so I get a chance to go to screenings of obscure movies at times.
One I recently attended involved a lecture on the overlap between Crip Theory and Queer Theory, and was followed with the film Otto, or Up with Dead People, a movie about a guy who thinks he's a zombie and gets cast in a movie billed as a "gay zombie porno." If you think this movie sounds strange, it is. The person giving the talk apparently thought it was an enjoyable combination of disability and queer issues since it combined physical disability (being a zombie) with being gay. The movie is a laugh if you can enjoy horrible pretentious art movies, and it involves graphic zombie sex, which I don't think can be found anywhere else.
Now onto discussing some gay movies in general. I think there is pretty much 4 main categories of gay cinema.
The first category is the Hollywood apologetic, films that are all about showing that gays are people too, in case you weren't sure of that beforehand. I would include Philadelphia, Broke Back Mountain, and Milk in that category. Transamerica is another one, but that's about transgenders. Those examples are good movies, but they aren't very interesting movies. None of them really does anything too daring or new.
The second category is what I would term the queered-Hollywood-generic-plot genre. These are films that copy the usual formulaic crap produced by Hollywood, and just make everyone gay. So, this includes a whole slew of gay romantic comedies, dramas, and usual garbage. Some are decent, just like some formulaic Hollywood movies are decent. A decent recent example of this is Shelter, a romantic drama about surfers that is so-so. I would maybe include in these films the sub-genre of the magical gay fairy land where practically every character in the film is gay as a way to avoid dealing with any pesky social realities.
The third category is the impossible to ignore Coming Out film. These films are usually also combined with a typical love story, bullying plots, and occasionally the bigoted parent story. They usually involve teens, like Beautiful Thing and Get Real, two British coming out films that are quite good for what they are. An American example of the top of my head would be Edge of Seventeen, though I'm less fond of that movie. These films also tend to have a typical political message, but tend to be less didactic than the Hollywood gay films.
The fourth, and final, category is the experimental or subversive film, like the zombie movie mentioned above (or really any film by Bruce LaBruce). I'm going to give a paragraph to each film I want to mention in this category to give them each their due.
Shortbus - here is a film about sexual diversity, although a gay couple is a major part of the plot there are also heterosexual characters. The film concentrates on different conceptions of sexual freedom and exploration, and revels in the excess of it. It also features unsimulated sex, but it's not filmed like a porno, giving it an interesting feel, a bit like a less tiring Caligula. In this situation, I think it's more than just erotica, it's form simply mirroring content.
Funeral Parade of Roses - This is a bizarre, bizarre, experimental film in the tradition of French New Wave from 1960s Japan. It was apparently a major influence on Stanley Kubrich. What I love about the film is the intimate look at Tokyo gay subculture, mostly drag queens, at a time when such Western ideas were pretty fresh in Japan. There are meta-cinematic elements, like a "sex scene" where the camera then pulls out to reveal that it is a foot massage and that a camera crew is there filming it. There are also interviews where individuals speak about what it means to be a drag queen (or a simply a queen as they term it in the movie) and what it means to be gay.
Totally F*cked Up - this is a Gregg Araki film, I had to include one film from what is termed the New Queer Cinema, mostly a group of New York based film makers working in making gritty dark gay themed films in the 90s. This is a film that follows, sort of in a fictional documentary style, the life of a group of lesbian and gay teens. It isn't exactly an exciting film, but it addresses a lot of central themes in a lot of gay media. Notably it addresses the issues of the general polyamorous behavior of the gay community, and the issues of dealing with infidelity, alienation, AIDS, and such that arise from it. As an example of Araki's usual take on this stuff, the gay couple that champions monogamy in the film is of course broken up by cheating, and of course they're torn up about it. It raises the questions of if gay people can fit into the usual relationship frameworks that are tailored really to heterosexuals, and what does it mean for gay people to want that heteronormative lifestyle.
Honorable mentions to My Own Private Idaho, Mysterious Skin, The Boys in the Band, and Hedwig and the Angry Inch. I should also mention a lesbian film worth watching, it's kind of campy and horrible but a groundbreaking early representation of lesbianism in film, Personal Best."
Edit: I've also developed a recent fondness for gay cinema from East Asia, nothing has really blown me away though, But the ones from Taiwan and Hong Kong provide an intriguing view into a different, yet strikingly familiar, world. I guess Lan Yu, from Hong Kong, wasn't so bad a movie.
I should also give a shout out to local talent and champion Xavier Dolan's two first films, which are charming but flawed movies.
http://en.wikipedia.org/wiki/J%27ai_tu%C..._m%C3%A8re
http://en.wikipedia.org/wiki/Les_Amours_Imaginaires