Yeah, it's used uncensored in both El Scorcho and Undone. However, it is censored in This Ain't A Scene, It's an Arms Race, which makes the censoring rules a little confusing. And while I'm on that subject, why did they censor "crap" when they released Runnin' Wild? E10 rated games like Shadow the Hedgehog have shown can easily use that word and a couple worse ones.
And yes, the n-word has been and can be used in Teen rated games (Jet Set Radio Future is one example), as can the S-word (Tony Hawk's Underground did), so the removals of those words in Rock Band is probably, as wrldindstries said, for sensitivity reasons.
Actually, I think that technically, the Teen does allow the f-word (especially since the introduction of the E10, which gave the Teen a little more weight), and I remember that The Offspring's Way Down the Line was not censored in Crazy Taxi (at least not on the Dreamcast version).