What should you do if your 10 year old son likes wearing purple sparkly nail varnish?

He may like it at the moment, but you allow him to do it. Sometimes it's more important to be a parent than a friend. There is nothing wrong with having rules and enforcing them. He may well be gay and is just starting to figure it out. If he is, there is nothing to be done about it. Point out that he doesn't have to be feminine to be gay.

At 10-years-old he probably is just curious of your things and wants to try things on. Lots of boys wear makeup these days, it is the fashion with Emos and Goths. Try not to sexualize him at this tender age. He has all that to come as he enters Puberty.