No offense, napa, but a few things could be improved:
1: For p2p, instead of "/msg me", I'd suggest using "/echo -a" or something of the such
2: Instead of looping through the "bad word" list you could speed it up with(I think):

; Escape the curse word list, so anything stored in it doesn't alter the way the regex works:
var %r = $regsubex(%Cwords,/(?!\x2E)([[:punct:]])/g,\ $+ \1)

; Replace "," with "|" (In regex the "|" means "or")
var %r = $replacex(%r,$chr(44),|)

; Make it so it only matches words; ignore color codes and be case insensitive:
var %r = /(?:^| )( $+ %r $+ )(?: |$)/iS

;Check the users string against the created regex:
if ($regex($1-,%r)) {

  ;ban the user:
  ban -ku300 # $nick 2 Don't curse.

  ; Echo that the user was banned for cusing:
  if (%log.p2p) {
    echo -a $nick Was Banned For Cursing In Room # Date/Time $time(mmm dd h:nn tt) Word said: $regml(1)
  }

  ; Log to window if need be:
  if (%log.win) {
    window @Curse_Word_Dialog 
    aline @Curse_Word_Dialog $nick Was Banned For Cursing In Room # Date/Time $time(mmm dd h:nn tt) Word said: $regml(1) 
  }
}