Wow...so many misconceptions!
First off, I'm going to introduce myself as one of the few members of the Canadian Forces to transition in uniform. I joined the CF in 1987 as a radar technician, and currenly work as an ATIS technician here at Trenton. I transitioned starting in 2003, the 8th to 'officially' do so. (I say 'officially' because I personally know two MtF CF members, who joined the CF already transitioned, well before Sylvia Durand arrived on the scene. I suspect we're probably well over the 30 mark by now.
Since I transitioned, there have been many changes. First off, there now is an official policy. I understand this from someone else I know who is in transition now. I have yet to see it, but I do have my feelers out so that I can. The way I understand it, a trans person does not get the status of the target gender until full SRS has taken place. This is different from what I experienced, where I was declared 'administratively' female from the day I went fulltime. For me, that meant female standards for everything, from new DEUs to female standards on the Express test, (a MtF person loses a LOT of muscle mass on HRT), to getting the old female CUA, (which disappeared shortly after).
I'm not going to do a Trans 101 here, because the information is readily out there at places like TS Roadmap or Lynn Conway, but anyone here can ask me questions. I've always professed to be out and open, as you can't help anyone from inside a closet. However, I can really only offer my perspective as a MtF transitioner, not the other way around. There are some things I will debunk here, though...
Transition is not a choice. Gender is hardwired before birth. For so many of us, the only 'choice' involved here is whether or not to do anything about it, with the alternative being suicide. Trans people have one of the highest suicide rates in the world. But there is a treatment, one that has one of the highest success ratings in medicine.
Surgery is not cosmetic in nature. It is more reconstructive, and uses existing tissues to fashion the new genitalia out of the old. With the exception of the discarding of the testes (MtF) and uterus/overies (FtM), everything else is used.
Don't even get me started on penguins. Someone's been watching waaay to much South Park.
In one respect, I can understand why one can't join up while mid-transition. If you're transitioning, you're placed on TCat, therefore can't train. So why bring on somebody they can't train? However, there are a few grey areas here, especially when it comes to the guys, for whom SRS is expensive ($100k or more), as there's more than one surgery involved. So many of the guys tend to not deal with anything beyond top surgery i.e. breast removal/chest reconstruction and hysterectomy. These should be enough to qualify a FtM person as male, but somehow it's not. (I guess it really is all about the penis, right guys?)
One last thing...prevalence. You'll hear much in the media about how 'rare' TS really is, usually spouting numbers such as 1 in 37000 for the girls, 1 in 100000 for the guys. Prof. Lynn Conway has debunked this quite effectively. In this document, she demonstrates that the prevalence of known cases of SRS is closer to 1 in 2500, with the extrapolation that the prevalence of transsexualism be closer to 1 in 1000 or higher, putting it in the same company as Muscular Dystrophy, Multiple Sclerosis, cleft palates and Cerebral Palsy.
OK, so that's my introduction. Fire away with the questions I know some of you have!