Transvestite is the term from the medical establishment, and is defined by the american diagnostic manual (can't remember the right name at the moment) as having a 'fetish' involving wearing the clothes of the other gender; 'fetish' being used there in a medical sense meaning something that is necessary or virtually necessary for you in order to function sexually. But the diagnostic manual has very low standards for "diagnosing" transvestitism: if you Dress Up more than 3 times in your life, even if they have nothing to do with sexual situations, then you are so labeled.
Because the diagnostic manual is a disorder about fetishism, those for whom dressing is not a fetish (in the technical sense above) decided to create a more public-relations friendly term, and came up with "crossdresser". Crossdresser does not inherently imply fetishism. Sure lots of guys get a sexual thrill out of crossdressing, especially when they are relatively new to it, but if your dressing extends beyond sexualism, then most people around here would use the term crossdresser instead.
