Good question!

Some time ago I went for an interview to work in a mental health hospital. I was interviewed by a panel of three, one of the people interviewing was a service user/patient. There was a deep question about labels and I went on to say that I prefered the terms 'psychological distress' and 'psychotic experiences' rather than the label of schizophrenia. But the service user/patient jumped up and declared proudly, 'I am schizophrenic!'

I think it really depends on the individual on what term they prefer.