The major problem is that not even transexuals understand it, let alone the whole medical scientific community. This is very much on theory level still.
The two theories I think makes the most sense is 1) the "queer theory" where our genders are defined by 10 hormones that we can have in various quantities. These define our gender. The genetic theory. Only one of these define our physical characteristics, ie testosterone. In theory, the other ones define our behaviour and sexual preference. If all or some are on the "opposing" side we get confused.
Genetically women are the base model for humanity, and the male is just added parts. That's why men are susceptible to about twice as many genetic diseases as women, because of the diseases that only attack the male part can't touch girls. While diseases that attack the female part can effect both men and women.
2) Another theory I like is that in order for gender confusion to arise we need first up very strong images of female and male behaviour. Where certain behaviour is taboo for the other sex, especially when it comes to flirting and sexual initiative, and we simply identify with the patterns allowed for the opposite sex.
Anyhoo, none of these are even remotely proven and we're still very far off from getting any definite answers. And as far as funds for research it's not going very well. Not even the gay-rights people seem to be interested in finding money for this. It's a shame.