As most of you may know, November is Prostate Awareness Month; however, some of you may not know it is also Transgender Awareness Month, and as such, I'm going to give you a quick lesson on pronouns and transgender faux-pas:
The correct pronouns for a female who was assigned male at birth/ male-to-female trans human: she, her, hers, herself.*
The correct pronouns and their declined forms for a male assigned female at birth/ female-to-male trans human are: he, him, his, himself.
These are to be spoken and written as such, no quotation marks please (i.e.: "she") ; no dehumanizing pronouns like it sil vous plait. Most of all, if you use the term he/she to describe a trans person or deliberately assign the pronouns of the person's birth gender, you will come across as stupid at the very least, with the most likely interpretation being that you're an asshole. If you're in doubt, quietly inquire.
Most transitioning folks will understand if a person makes the odd pronoun mistake, particularly if you've known him or her for a long time and this is a new deal, but some will be pissed. Personally, I think in degrees of malice- if none is intended, I take no offense; if pronoun fuckups are repetitious and done to belittle me or emasculate me in public, I'm probably going to leave and/or avoid any further darts matches.
Also, never call a trans person a tranny- the term is along the same lines as faggot. In many circles, it implies that the person is a prostitute, which is probably not the implication you're trying to make. Furthermore, if you think you "see" a transgender person when you're out in public, don't run up and talk to him or her like the person is a circus freak. Gender expression is varied, even amongst folks who were born in their desired gender, so you may be making a mistake, and in real life Jenny may get a little pissed if you tell her you think she used to have a penis. We don't live on the set of Maury Povich. If you would be uncomfortable with a stranger asking about your nethers, it's safe to assume that the person you are approaching would be as well.
Finally, if someone you know is trans, don't announce it out in public. Transgender people are frequently raped, maimed, murdered, and arrested without cause. (There is an old study that stated that 89% of young trans people had been assaulted or threatened with violence. I think that estimate may be low.) Even if none of the harsher things occurs, you're publicly shaming someone and making the person feel threatened, and that makes you an idiot. Also, most people don't want to know if their hairy-assed plumber used to be a pretty girl named Anita. If you're curious about something related to someone's transition, address it privately.
So how do you treat a trans person? Like a human first and foremost- like your neighbour or friend or kid. The person is still the same even though the exterior may have had a few upgrades.
When we begin or continue to treat all people in a manner consistent with the way we wish to be treated, we further the growth of our species and pass along a little decency along the way. Whether we are fat, thin; young or old; male, female, or anything in between, we are all cells that make up the glorious human condition. And our actions are what determine how close we really are.
*There are acceptable neutral pronouns like zie, hir, etc. used amongst some groups of LGBT people to describe trans-identified people, but a lot of folks who are stealth won't dig them. Plus, they aren't adopted by all people; I am not a fan because they remind me too much of female pronouns, and I identify as a binary male.