I am a transsexual myself, and I think Diamandahagan is over reacting.
Statistically speaking the vast majority of trans people transition later in life normally starting in their middle to late 30s. Add to that they generally have a history of trying to repress their feelings through ultra masculine activities they have conditioned their bodies to be noticeably male. The unfortunate truth about these late transitions is that a significant portion of them do not manage to pass easily as women. The statistics and biology are no in their favor. Also someone who has significant knowledge of trans issues will find it easier to notice a trans person because they will be able to notice the signs that are generally there on anyone who transitioned after puberty. As a transsexual myself I can notice signs because those are the very same signs I despise in my own body, I have done so on people who pass amazingly well. People who pass so well I wouldn't have suspected them at all, if I was not a transsexual myself.
Next, and this is important, non transsexuals have an incredibly hard time understanding transsexuals. It makes no sense to them. They do not understand the torment of being in the wrong body. They cannot comprehend the thought of undergoing surgery to alter ones sexual organs. To them the thought of a minor injury to their sexual organs is pretty horrific, but to a trans person undergoing a willing complete alteration of those organs is a great happy moment. The difference is perception. Someone who is at peace with their body cannot understand what it is to be at such odds with ones own body.
However despite these misunderstandings, there are many who support transsexuals. People who may not understand all the aspects of it, but who support our rights to be who we are. Not everyone will understand. I don't think anyone will ever understand completely. With the misinformation and bad press transsexuals get many have misinformed prejudices. However they will normally recant those prejudices if they are politely educated on the reality of transsexuals. It helps transsexuals far more to inform others in the complex issues surrounding transsexualism than it is to scream trans-phobia when they misspeak or don't understand something.