I've done some cursory research on transexuality just reading forum posts and blogs that summarize the research on transexuality. I have a background in psychological research, so here's my evaluation:
1. There's a fairly large consensus that "the cause is biological". In other words, transexual people have different brains, and those brain differences are likely caused by some hormonal or biochemical imbalance that occurs in the womb between weeks 12-16 or something like that.
2. I have yet to see any research examining personality traits. The "transexual" population is really the population of TRANSEXUALS WHO ARE OUT OF THE CLOSET. It's fairly easy to imagine that a LARGE subset of the transexual population is and will forever remain "in the closet."
3. Transitioning in the only known cure for gender dysphoria and gender identity disorder.
My take on this stuff:
Saying that "it's in the brain" is nothing more than a tautology. This explanation completely ignores a person's life-long social and chemical environment, his/her family life, personality traits, society in which the individual lives, etc. etc. In addition, the individual typically must have outside assistance to come out of the closet and be found for research.
There's a sweeping assumption that the transexual population is mentally ill and should be classified thus. I strongly disagree with this. Is it not possible for a perfectly healthy individual to desire to become a member of the opposite gender/sex? Are we so opposed to the idea of self-determination that it's inconceivable that automatically assigned gender roles won't make some % of the population unhappy and cause them to want to change that role?
Science attempts to answer the question, "What causes transexualism?" as if some kind of definitive answer can be given. It's like asking, "What causes some people to want to be rockstars." While certain correlational research can be done which predict likelihoods, I think attempting to come up with a causal model is simply not worthwhile.
I like to think of transexualism as more of a process than "A causes B". Something like:
1) An individual must first experiment with their gender role at some point in their life. Transexualism cannot occur without this step.
2) They either come to internalize their assigned gender role, fail to acquire an internalized gender role, or internalize the opposite gender role. Many people with GID or GD report internalizing the opposite gender identity at a young age. Crossdressers seem to internalize the opposite gender role later in life, typically during adolescence.
3) Society provides feedback to the individual about their gender role - if there is a conflict, the individual must seek to resolve this conflict via changing their belief about their gender, seeking help, etc. etc.
4) If the individual perceives transition to be a possibility, then there is a high likelihood that the individual will transition to a more appropriate lifestyle.
This is similar to the "14 stages" listed in another thread.