Hmmm, I hesitated to respond here as the previous comments do cover the subject pretty well.
All agree that context is necessary to answer your question. All cover the general meaning of the word "funny".
However, it's important to realize that a speaker's intention and meaning does not necessarily directly influence how a listener interprets what has been said. Complimentary intention or not, a listener may see being called "funny" as insulting (as Dan and Cherry wrote). However, Bia is equally correct when she addresses the humorous meaning of "funny". Being humorous may or may not be situationally appropriate, but being referred to as being humourous is seldom a negative thing in my opinion.
Ultimately, I'd have to say that there is no such thing as a "bad" word. There are words used to insult, to convey negativity, and those which are slang. But in and of themselves, no words are "bad" or even "better" than others. Sometimes, it's not what you say, but how you say it and when you say it.