I think that one of the greatest causes of misunderstanding is that for most people, gender isn't actually the same thing as it is when spoken of by academics, psychological practitioners or transpeople; they do not think of it in the same ways, and it is rarely explicitly conceived of at all. Then, there are places and moments of rupture - as when one sees a man wearing a dress - that violate the unspoken, vague and sometimes contradictory webs of "gender" that exist individually and collectively in our society. Perhaps the mistake is that either understanding is correct.
Very interesting how the language we use can shape our view (in this case and many others). Perhaps transgender is a poor word, a loaded word that automatically leads to misunderstanding. I don't know what a better word might be, but I think that such a dry, academic term subconsciously tells us that this is a mental disease. A softer term may go a long way. I think people have accepted the term gay, because it is so nice and non-threatening. It therefore allows one to see the people behind the term, and in my opinion may have possibly contributed to our acceptance of gay people in society. Homosexual on the other hand is cold and clinical, and do you know any gay people who describe themselves as a homosexual? I don't, personally. Maybe transgender should be replaced.
I recall reading that native americans would call transgendered people names like "two spirit", and would celebrate their uniqueness. I agree about the words gay/homosexual. Conversely, the term "straight" implies that the opposite is somehow askew.
Exactly. I only wish to point out that there are problems on both sides. For example, I know a person who identifies as a man but has a female body. He gets offended when people call him a "woman," because as far as he is concerned, he is a man. But in a very real sense, to everybody else she is a woman. There's a disconnect between how the trans community seems to talk about gender (in my own brief experience with it) and how most people actually think about it.