Seriously, it's not like they just wake up one day and think "Hmm... I want a penis/vagina..." Transgendered people (and by extension transexuals) are just that. They self-identify as the opposite of their genetic gender. It's rather moving actually to hear transgendered people talking about their lives, especially during puberty. Betrayed is a word that comes up rather frequently.
And yes hormone therapy is a requirement before they'll do a sex change op. It was especially interesting to me (as a male) to hear about female -> male shifts. As I recall one said "before I wanted to cuddle... now I've just got this sex drive that's there all the time..." To me at least, it was a little bit comforting to know that what I feel as an oftentimes "exuberant" libido is normal. I, as have most other men, hear derogatory comments like "All he/guys think about is sex..." rather often.