The correct answer to the question "Is Tranny Gay" is "Ask Her"
Transexuality is - in fact - a matter of gender, not of sexual preference.
Does tranny appeal to gay? - not really, gays prefer the male gender...
The vast majority of people interested in transexuals are straight men, women and other transexuals.
Some very well informed comments from Linkster, mml and DoubleP... good points from Kezza too...
But the grand prize goes to finnbear - who's answer was virtually perfect
(...transvestitism / crossdressing is - in itself - really more of a clothing fetish - a bit like bondage really - it's done by both straight and gay men - the majority are straight simply because most men are!)
Many transexuals whose sexual orientation is towards women simply live as men, some cross dress in secret, some with their partners and many just spend a lot of time in that big African river (de-nile)...
The best place to put them is their own niche but you can really pull sales using them as a shocker ad on straight sites...
The biggest mistake you can make is to emphasise their masculinity...
Guys who are turned on by transexuals don't like to think of themselves as gay because they aren't - so many of them will shy away from "Chicks with Dicks" - emphasise the femininity and "ignore" the masculinity - you'll do much better.
Oh - and a transexual site which doesn't include the words "secret or hidden" in the title would be refreshing