My interpretation, as a lawyer, is that the second holding in the Schroer case, that it is literally sex discrimination to fire someone for changing their sex, seeks to overturn the Ulane line of cases that transexuals are not a protected class. Meanwhile, the first holding of the case that it is also sex stereotyping, is firmly in line with the Price Waterhouse line of cases, without extending them in any way.
That is not to say that it essentially declares "transgender" to be a protected class under the second holding. Rather, only those who are legally changing their sex (i.e. transexual persons). But there was also dicta saying that other types of transgendered might also be protected under a literal reading (e.g., intersexed, I presume).
As was discussed at length, the Schroer case is not binding anywhere, including other district courts in the DC Circuit. And many other Circuits have conflicting law that prevent courts in those Circuits from following the Schroer decision, even if they want to apply it. Plus, it seems highly likely that the Schroer case will be overturned by the ultra conservative Circuit Court, and the Supreme Court will refuse to hear the subsequent appeal by denying Certiorari. But that will not likely have any impact on the Price Waterhouse line, which remains our best tool for protection and is available nationwide.
To recap, the Price Waterhouse line of cases says that it is illegal uder Title VII to discriminate against someone for gender non-conforming appearance and/or behavior. It amounts to a right to freedom of gender expression. Men can present as women at work and vice versa, regardless of whether they are transexual. The weakness in the doctrine is that of the Pretext for firing on "other" grounds. For example, the employer might show they fired you for being a transexual person regardless of whether you intended to ever present as the other gender (e.g., they have a history of firing people diagnosed as transexual but evidencing an intent to never transition). Or, as in Etsitty, if they can say it is because they are afraid of being sued when you use the public ladies room as a preop (although I think it key that the plainitiff ADMITTED in that case that use of the ladies' restroom was not protected gender non-conforming bahavior for a non-transgendered male). But in the case of private, not public, restrooms, and where one pleads that all men have the right to use the ladies' room, and where the employer asserts no other credible pretext for firing you, then protection under the Price Waterhouse line of cases seems likely to me.
But let me be clear: I am not your lawyer; and this is not legal advice.
