1.) Over/under is normally meant to judge a line that would be a good guess for something quantitative. Like "over/under on number of minutes in the next youtube video Dent posts." Someone would say something like "114" and then you (or anyone else) would guess that the real answer will either be over or under that mark.
We could use it on something like "Is DH a latent homosexual" if we use percentage, though. For example, I could set the over/under at 90% and you could either take over or under. You won't necessarily be right or wrong here (because the answer is either 0% or 100%--you guessing one side of a percentage is more of an opinion thing), but it will show how strongly you feel about it.
2.) I've had drunken, heart-to-heart conversations with DH about his feelings about homosexuality before. Unfortunately, although he is obviously kicking it up a notch for shock value here, the underlying thoughts he's building on are quite genuine.
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