Homer asked for change for $1 to call the police at the Kwik-E-Mart. However, pay phones do not require payment for 911 emergency calls--which an armed robbery in progress would definitely qualify for.
Lenny asks "which one" Milhouse is in response to Milhouse's song. Carl then congratulates Lenny for mocking Milhouse's sexuality. Lenny was actually mocking Milhouse's gender.