When a fellow player's freeform improvisational style makes the GM squirm, that's great. When things take a sudden turn and that player's wild ravings start to work against the other players, you can almost hear the grin spreading across the GM's face.
On another note, "diplomacy" is one of the most versatile words in the player character arsenal. It covers pretty much any conceivable action in any imaginable scenario.
Captain Tarpals: Jar Jar! Why did you bring these humans here? You know they're not allowed.
Jar Jar: Oooh, Captain Tarpals! Sorry, mesa forgets.
Captain Tarpals: You'll be in trouble for this.
Jar Jar: But, wesa can use the humans for food!
Qui-Gon: That's a good... hey, wait, what?!
Captain Tarpals: Mmm. Excellent thinking, Jar Jar. Our fish supplies are running low.
Qui-Gon: If only we'd taken some of that tuna booze oil, we could bribe them...
Obi-Wan: Sadly, captain, our flesh is poisonous to your kind.
Jar Jar: Oh, don'tsa worry, wesa knows how to cook humans!
Qui-Gon: Time for some diplomacy...
Obi-Wan: Captain, with respect, we come as ambassadors. There is a droid army invading your planet. Humans and Gungans must unite or both will perish. I roll a 15.
Captain Tarpals: Hmm. Very well. You may present your case to our leader.
Qui-Gon: Oh. Huh. I meant laser sword diplomacy.
GM: We know.