The term in itself certainly isn't offensive. If I were a transsexual, I would object that I was NOT cross dressing. As a transgendered person, but a bit ambiguous on what gender is and what I am, if called a cross dresser, I'd say, "maybe, maybe not...check back with me later..." If I was a male who identified unambiguously with being a male, but enjoyed wearing women's clothes, the right response might be 'yes, so what?"
