My daughter is reading 'The boy in the dress' by David Williams. It deals with a transgendered boy who is coming to terms with himself. He finds a girl friend who helps him to embrace his feminine side and has his first experience being 'out'. It isn't all fun though as he is also forced to confront the harsh reality of beign TG. 

It is quite a good book for children and deals with the issue in a sensitive way while still making the book an enjoyable read for children. I think it would be very useful for schools to have available as well as those children who have a family member who is transgendered as it may help them to start to understand the issue.