An interesting sideline is that, in the novelization for 1979's Star Trek: The Motion Picture, the writer appended a message from James T. Kirk -- written from the future -- were Kirk disclaimed any sexual relationship with Mr. Spock. He pointed out, among other things, the disadvantage of pursuing a physical relationship with someone who only comes into sexual heat every 7 years.

Apparently this was in response to the contention by some gay interest groups that the Kirk/Spock relationship was one of the greatest love stories of all time.

Now, I don't see Kirk/Spock in that way, but some of the red shirts seemed to me to give each other rather lingering looks.

Since Xander and Willow were both firmly established as heterosexuals, I don't think it would have worked with Xander any more than it did with Willow. The bottom line is that it would have been a major u-turn no matter how it was done, one that smacked of a writer forcing the characters to act out-of-character.

Perhaps Whedon should have introduced a brand-new character who was gay (like Tara), instead of forcing one of the regulars into a mold that didn't fit what had gone before.

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SER: I agree. The reason I mentioned Xander is that he would have made more sense for such a revelation. Willow definitely didn't. And I think it did more harm than good -- presenting her sexuality has some sort of light switch. For instance, an episode in the final season had Willow interested in a guy (based on a spell) and the reaction was "you're a lesbian," as if she'd never been interested -- genuinely interested, as in making out with and such -- in a man.

If there was a transgender character who basically had to announce this fact every time she/he appeared, it would become like the 90s joke about vocal homosexuals, "When did the love that dare not speak its name become the love that won't shut up?"

She used the storyline to address gender issues. 

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 That's fine, but what about future storylines? The character being transgendered isn't something that can be so easily made known to new readers without clumsily inserted reminders. If a character appears in a serialized story, occassionally things must be shown or mentioned to let new readers have the information that is vital to the characters.

 A long time reader of Spider-Man, for example, would know that Peter Parker is a photographer, but a new reader will only know this through reading scenes in which Peter takes pictures, or mentions it. Inserting a photography scene is easy. Inserting events or conversations in which the audience is reminded of the character being transgendered isn't so easy.