Cross-dresser versus transgendered versus drag queen...

There is a difference between these three labels! Drag is usually donned for entertainment purposes or theatricality. There are both drag queens, and drag kings. Drag is usually thought of as a sort of performance art, popular in the queer community. (This is mostly the idea we're going for in our production of AYLI.) 

A cross-dresser tends to be someone who simply prefers to dress as the opposite sex on a regular, daily basis. Cross-dressers aren't performers, and often identify as heterosexuals (see Eddie Izzard clip below). They do not actually desire to become the opposite sex; their cross-gendered behavior is an outward or external identity, not an internalized one.

A transgendered or transsexual person, sometimes referred to in psychology as someone with gender dysphoria, feels that he or she should have been born as the opposite sex. Transgendered people will often try to live a normal life as the opposite sex, and some undergo sex-change surgery in order to actually become the gender opposite the one they were born as. The film TransAmerica with Felicity Hoffman is about a male-to-female transgendered person.

For a quick, simple article on the subject, see this link from e-How. For more info on gender, see links in the actor packet, via the sidebar to your right!