Transvestite is a slur
Oops, didn't know that. No offense everyone.
It depends, really. It may be like calling a mentally deficient person a 'retard': it is literally correct, and a perfectly legitimate use of the word, but it now has derogatory connotations. [hotbuttonrant] Calling the mentally retarded (I use the term literally and without the derogatoriness [I looked up the noun form of derogatory, and that is the right word] normally implied) 'special needs' annoys me, because not only is it overused to the point where the word 'special' can indicate mental deficiency, but it demeans those who have obvious physical special needs. We don't call cancer victims 'special cells people', do we? [/hotbuttonrant]
The definition of transvestite is, and I quote:
a person and especially a male who adopts the dress and often the behavior typical of the opposite sex especially for purposes of emotional or sexual gratification.
"Transvestite." Merriam-Webster.com. Merriam-Webster, n.d. Web. 6 Mar. 2014.
http://www.merriam-webster.com/dictionary/transvestite. (They had a 'cite' function, so I thought I wouldn't let it go to waste.)
Is there a reason you consider 'transvestite' a slur? I've never heard it used as a slur in and of itself, the closest thing being 'trans' (which would still apply even if you used the term 'transgender'), but I am interested to hear your examples. (As in actually interested, not sarcasm.) I can imagine the term being misapplied, but then again, I can also imagine sex-change surgery being thought of as a particularly extreme and permanent form of cross-dressing.
Sorry for the rambling post, I didn't get much sleep last night but I'm not tired yet, so that means my brain keeps shifting all my random thoughts onto the main track to keep them straight.