I used to be bothered by terminology also, even had a similar discussion on another forum. The problem is that the world is still largely uninformed about any transgendered people, and so are many of us, so there is this large amount of varying vocabulary. I think that most branches of ->-bleeped-<- are still being perfected as far as terminology goes, and the best thing we can do is stay informed about any changes.
On top of the aforementioned regional and continental differences, like it or not, many plain (that's right, plain, not not normal) folks associate "transsexual" with some kind of deviant behavior due to the "sexual" part, which I understand. I say understand, not approve or endorse. So like others, I adjust my description based on the level of understanding being shown to me by whomever I'm speaking with. If I see that they understand nothing trans, I like to use transgendered, which I feel has a softer sound to it. I use transsexual around friends and family, because they know the definition. However, I am a transgendered person, and transsexual person, so why should it matter? If one already is familiar with the definitions, then one wouldn't need to ask anyway. It's not like the public at large will be less confused by us if we all stick to the same lingo, right?
Also I don't feel like I have a mental condition that needs to be proclaimed to those not a part of my life, and I only embrace the term "GID" because I had to to get my hormones. Bottom line, our culture is barely coming into it's own, thanks to the Internet, (and Chaz Bono!) and I believe that we'll see a more uniform set of vocabulary as time goes on.
I live in the southwest, in the USA. I'm white and live about 100 miles from Mexico. There are lots of people here who do not speak English. I understand a little Spanish, and many Mexicans understand a bit of English. My point is that we communicate, it may not be pretty, but as long as we understand each other, then what's the problem?
