While I agree that the world is becoming too PC, there are some instances where actually it needs to be. This is not the 1950s or 60s anymore, and employers do have a duty to protect their staff from any kind of harassment, sexual or otherwise. I am not saying the older ways of dealing with things was wrong - I have no doubt it was highly effective. But the reality is, in the main its not effective anymore.
I am not against banter in the work place at all. If I went to work in a company and everyone was all serious and boring, in all honesty I'd probably quit. However, it does have to be measured in that you can't just jump straight in at the deep end with banter with someone you barely know. Some may like it, and appreciate it as it can often make you feel like part of the team immediately - it certainly would me. However, the reality is that everyone is different and if you start with the banter straight away, they may already go home feeling they will hate the job.
I also agree that far too many people are keen to sue for very little these days in search of a quick buck. However, that does not mean that the whole system of taking a company or individual to court should be abandoned because some people have a soft disposition or are just looking for money. The system needs to be there to protect everyone, male or female, gay or straight or whatever ethnic background. Without knowing what was said by who, and what actions were taken to prevent it getting worse etc, its impossible to say what will happen.
The only thing I know is when i get a job (hopefully soon) I will have to be quite careful for I am sure that the nature and consistency of banter in the Army is unwatched in most civilian companies.