Ken Kaniff is Eminem's gay persona. He is featured in skits on the Slim Shady LP and The Marshall Mathers LP. One promo tape featured Ken Kaniff prank calling people (he was looking for two strong men... and a van). He is also mentioned or featured in a couple of Eminem's songs. A freestyle from The Tim Westwood Show had Eminem rapping a verse as Ken.

It's hard to say why Eminem uses the Ken Kaniff persona. It's possible he's homophobic and Ken is used to ridicule gays, but I don't really think this is the case. Eminem says that almost everything he raps about is said in jest. He might be using Ken to express his own homosexual feelings, but I don't really think this is true. I think that Eminem is just having fun and doesn't really care whose expense it is at.
This is the aforementioned Ken Kaniff freestyle:

This is Ken
I'm back again
I'm here to rap about men
That's all I think about all day is men
I'm not a homo
I'm just gay and I'm doing a promo
For Slim Shady
I came out the closet to say "Oh Baby"
Oh hell yeah, bro
What you think about gay men?
Oh, no
This is Ken Kaniff
And if you want a riff
I'll leave you even stiffer than my dick is
You know what this is?
This is Christmas for all men
Call girls, even small men
I don't care
I wear no underwear
And I wonder where
I'm gonna take it next
Take this ecstacy and get on the plane
Fly to Spain with a bunch of pain
Or men...

(Chanting) Little little boy, little boy, little boy (x4)