Thailand is famous for its Lady Boys, men who dress and behave as women. These sometimes look incredibly realistic to the downfall of many male tourists. Thailand is very open-minded on the whole and Lady Boys are an unmissable and obvious part of Thai culture. You will see many shemales around working in restaurants, hairdressers, bars, hotels and shopping centers. Katoeys appear in almost all TV shows. In the future, there might be a prime minister who is a lady boy.
Buddhism teaches tolerance, and drag-queens, transvestites and transsexuals are more open about it in Thailand than in the West. Beneath the surface though there may be more prejudice than appears on the surface but laws were passed in 1997 to make everyone equal. This still doesn't prevent discrimination. Kathoeys are portrayed in the media as figures of fun - while this may seem harmless, it means that they are not taken seriously.
Thailand is a popular place for sex change operations as the hospitals in Bangkok are very good and it is cheaper than in the West. There are many clinics which specialize in gender realignment surgery. Men can have breast implants and both sexes can be given new genitals. Hormones have to be taken first.
Thais who change sex have the right to change their title as well.