Ack. Had one of these threads flame up over at the RPGNet forums.
My short answer is that, due to some very-very-VERY bad experiences and practically NO good ones, I impose an implacable, unyielding, never to be exceptioned ban on cross-gender characters in any games that I run.
I don't play in games run by other GM's that have cross-gendered PC's in them.
All my older players are quite comfortable with that. The few who strained against the ban just moved on to other groups and passed into the fog of history.
The newer players I've gamed with seem much more puzzled by my "quaint prejudice", but respect my gaming abilities enough that they "humor" the old guy.
Mind you, I don't give a damn about the sexual preferences of PC's. No problems with any of the possible permutations. But I just can't stomach cross gender play.