"(I wanted to write "crazy people", but realized that’s not PC)"

It may not be PC (which is a synonym for being respectful) but it certainly isn't accurate. "Mentally Challenged" isn't an improvement. There's a huge range of humanity that have psychiatric disorders and developmental disorders. "Crazy" doesn't describe anyone with autism (not savant syndrome), or Down's Syndrome. "Derangement" is not a diagnosis (Robin Williams' character in "the Fisher King" has Post Traumatic Stress Disorder.

People with acute psychiatric disorders are ill. People who have disabilities have disabilities. People who have mental retardation (a medical term describing a low IQ) aren't necessarily suffering.

What really bugs me about this post is that most (if not all) characters portrayed by actors who have won Academy Awards have some sort of pathology. Edith Piaf and Daniel Plainview (There Will Be Blood) were pretty ill also. We're all on the continuum.

Rather than worrying about being "PC" or not, ask yourself if your description of people are accurate or respectful.