I'm actually studying transsexuality in my Gender class right now.
It's hard to tell how someone would react to it unless they've actually experienced it. I know that I certainly wouldnt know how to react, especially if I've never really seen said relative. I probably wouldnt be too preturbed by it, if that were the case. If it were someone more familiar though, I may be a bit disturbed, but certainly not to the point of counting them out of the family. One has to imagine how hard it is for them.
Transsexuality actually isnt that rare at all... in the United States there's estimated to be 40,000 transgendered male-to-females, and that only counts the ones who have already had the surgery. Yet alone the ones that can't afford to have it, or just prefer horomones. That makes the condition more common than cleft palate and multiple sclerosis.
Those numbers and facts came from a book I'd highly recommend you read, called
She's not There, by Jennifer (formally named James) Boylan. It's a breathtaking book about a man who is a transsexual, and shows his transition from loving father and husband to the 'Maddy' (combination mom and daddy) of the family. Its a real eye opener.
Sorry if this was a lot, but having just finished the book myself, I have a new view of the transsexual world. Give it a try, and good luck.
Jam it back in, in the dark.
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Temari