NPR had a recent report on two children who exhibited early signs of being transgendered.
The report is fascinating and challenging. Check it out at here. It's a 23 minute segment but well worth listening to.
In the report there are two sets of parents. The two sets of parents respond to their child's gender preference in very different ways. One set of parents allows their son to live as a girl; the other enforces behavior that is consistent with their child's biological sex.
Check out the story and draw your own conclusion. How we respond to this dilemma is a window into our own views and prejudices about gender. A knee jerk response to this story might be skepticism. If you listen to what the parents have to say you begin to understand that this is a real issue in these families, and the choices are not easy.
I wonder what would happen if one of these children had been born into an LDS family. I can imagine nothing but grief, given the fact the the church has a strong essentialist view of gender. Not only is gender biologically obvious in this view, it is also an eternal aspect of the soul. Therefore, transgendered children can't exist. (Yet, they do.)
I can also recommend some interesting commentary about this story, which is found here.
Also, there's a second, very moving report of parents who consider whether to allow medical therapy to delay puberty.