GLAAD's transgender media guide

I pulled some of the information but all of it is worthwhile to read:
http://www.glaad.org/reference/transgender

TRANSGENDER TERMS TO AVOID
PROBLEMATIC TERMS

Problematic: "transgenders," "a transgender"
Preferred: "transgender people," "a transgender person"
Transgender should be used as an adjective, not as a noun. Do not say, "Tony is a transgender," or "The parade included many transgenders." Instead say, "Tony is a transgender man," or "The parade included many transgender people."

Problematic: "transgendered"
Preferred: "transgender"
The adjective transgender should never have an extraneous "-ed" tacked onto the end. An "-ed" suffix adds unnecessary length to the word and can cause tense confusion and grammatical errors. For example, it is grammatically incorrect to turn transgender into a participle, as it is an adjective, not a verb, and only verbs can be used as participles by adding an "-ed" suffix.

Problematic: "sex change," "pre-operative," "post-operative"
Preferred: "transition"
Referring to a sex change operation, or using terms such as pre- or post-operative, inaccurately suggests that one must have surgery in order to transition. Avoid overemphasizing surgery when discussing transgender people or the process of transition.

DEFAMATORY TERMS

Defamatory: "deceptive," "fooling," "pretending," "posing" or "masquerading"
Gender identity is an integral part of a person's identity. Do not characterize transgender people as "deceptive," as "fooling" other people, or as "pretending" to be, "posing" or "masquerading" as a man or a woman. Such descriptions are defamatory and insulting.

Defamatory: "she-male," "he-she," "it," "trannie," "tranny," "shim," "gender-bender"
These words only serve to dehumanize transgender people and should not be used.

Defamatory: "bathroom bill"
A new term created and used by far-right extremists to oppose non-discrimination laws that protect transgender people. The term is geared to incite fear and panic at the thought of encoun­tering transgender people in public restrooms. Use non-discrimination law/ordinance instead.

NAMES, PRONOUN USAGE & DESCRIPTIONS

Always use a transgender person's chosen name. Often transgender people cannot afford a legal name change or are not yet old enough to change their name legally. They should be afforded the same respect for their chosen name as anyone else who lives by a name other than their birth name (e.g., celebrities).

Whenever possible, ask transgender people which pronoun they would like you to use. A person who identifies as a certain gender, whether or not that person has taken hormones or had some form of surgery, should be referred to using the pronouns appropriate for that gender.

If it is not possible to ask a transgender person which pronoun he or she prefers, use the pronoun that is consistent with the person's appearance and gender expression. For example, if a person wears a dress and uses the name Susan, feminine pronouns are appropriate.

It is never appropriate to put quotation marks around either a transgender person's chosen name or the pronoun that reflects that person's gender identity.