What does transgendered mean exactly?

I am not sure what the term refers to.

People who were assigned a gender at birth, based on their genitals, but who feel that this is a false or incomplete description of themselves.

http://en.wikipedia.org/wiki/Transgendered

someone who is born with genitalia different from what they are.

as: "exhibiting the appearance and behavioral characteristics of the opposite sex".

Dictionary.com defines it as:
1. Appearing as, wishing to be considered as, or having undergone surgery to become a member the opposite sex.
2. Of or relating to a transgendered person or transgendered people.

I think the dictionary.com definition is more on the mark, but still not quite accurate. I think that a transgender person IDENTIFIES with the gender traditionally assigned to the opposite sex of that person.

Compare with transvestite, which is often confused with transgender:

dictionary.com: A person who dresses and acts in a style or manner traditionally associated with the opposite sex.

m-w.com: a person and especially a male who adopts the dress and often the behavior typical of the opposite sex especially for purposes of emotional or sexual gratification.

Note that transvestites do not necessarily identify themselves as being the gender they appear as.

Funny the things you pick up being the significant other of a women's studies PhD student.

I think it would be helpful if there was a different name used for transvestite...maybe that would clear up the confusion a little?

Just out of curiosity, I wonder how "drag" differens from transvestite...is drag more for entertainment/performance purposes than transvestite or is it pretty much the same thing??

is considered a derogatory term by some. Cross-dresser or C/D is more favorable. Most C/Ds are Heterosexual Men, and as you have pointed out Drag Queen or Drag Kings are more for entertainment.

I had no idea...good to know since I certainly have no desire to insult C/D's. Thanks for the clarification.

A transgendered or transsexual person is one that has become or is becoming a member of the opposite sex.

A transvestite is someone who only dresses like the opposite sex.