"Classy with capital-K" originally refered to any thing reminicent of podunk white trash, specifically inbred red necks who were so uneducated they couldn't spell classy, let alone be it. Due to the ubiquitous nature of trailer trash in America, it's use has expanded in some circles to included any signifcantly "American" lack of class, style, intelligence, or social awareness. Examples are far more plentiful than I'd like to admit. Trying to pick up your sister's husband, exemplifies this term, doubly so if your sister is present. Construction workers whistling at passing women, while not the best example, also fits. Or You could take your pick of any thing said or done by a guest on the "Jerry Springer Show".
The best example I've personally witnessed occured when my wife's step-mother, Elaine, said she wanted to take us out for a special dinner as congratulations on our engagement. She chose the most expensive resturant in Kent, which isn't saying much. When the waiter asked what we'd like to drink, Elaine requested what sounded like "a giraffe of cha-bliss" and some mini pigs in a blanket as a "horse divorce". Cheri and I pursed our lips. The waiter, not missing a beat said, "The house white wine, very good. I'm sorry we're out of the mini sausages this evening, but we have a very nice smoked salmon spread. How about that? And three glasses for the wine?" Klassy meets true class, and doesn't even know it. Two excruciating hours later, as we were leaving, I gave him an extra $20 tip when Elain wasn't looking.