Here's my two cents worth.
I have nothing against transsexuals whatsoever, and I have no problem against Laura Bush's decision to change her gender. But what she did was overtly provocative, considering the audience, and I hardly think she could have gone in wearing those clothes without causing a stir.
Agreed, generally these veterans from the 60s and 70s are conservative men who disagree on things like transsexuals and homosexuality. They are less open-minded and accept new things less willingly. But this is part of their upbringing and something they have been comfortable with all their life. Remember, they themselves have sacrificed much for their country too, and their opinions deserve our respect, though not always our agreement. As Voltaire said, "I do not agree with what you have to say, but I'll defend to the death your right to say it." So we shouldn't condemn them as irretrievably bigoted for their views yet.
That being said, their views are by no means something we should accept, as they infringe on other people's rights. But acting as Laura Bush did would only isolate herself and make conservatives less willing to listen to what she had to say. By going up there and doing what most frown upon, she only guarantees her disapproval. If she truly was to be able to carry out her aim to spread awareness about transgenders, she would not get far by appearing as what seems to be the manifestation of their fears: as a crossdressing queer. The terms seem strong, but put yourselves in the other veteran's shoes. They've been under the impression for all their lives that transsexuals are gay people (another misconception) who are trying to justify themselves by crossdressing. And here comes along a transgender person who seems to be doing the exact same thing. Are they going to change their views in an instant? I think nyet.
Also, what Laura Bush did was, in my humble opinion, disrespectful. While I respect a person's right to dress however they want (except for things like indecent exposure), in certain events a degree of respect must be kept. At the point when Laura was speaking, she was still, by all intents and purposes, a man. And from what I understand from the article, the event was quite a serious one. Just as (I hope) at a funeral he/she wouldn't come dressed in this manner, I think that at this event she should have come dressed with a certain level of decorum. The VFW is a place for all veterans to commemorate their periods of service for their country, and to bring overtly controversial (by the people present) issues into the mix detracts from its main, nobler task.
You might think that I am being too soft on pushing for greater equality. Perhaps I am less strong in my efforts. But I come from a conservative society, where homosexuality is still frowned upon despite the nation's first-world status. By law, it is still illegal for two men to engage in anal sex. I have found when talking to ultraconservatives and conservatives, speaking from the moral high ground never, ever gets them to change their views. Rather, when I bring myself to see their point of view and try to reason with them why they are perhaps dated and unfair, they are more likely to reconsider their views. That is why I respect Laura's views, I frown down on how she expresses it, because they have been counterproductive.
I sincerely hope I haven't bored you all out.