Isnt ****** just the shortened version of the rather long word transexual?
****** is a slang term used chiefly to describe people who are transgender, i.e. transsexual, drag, transvestites or cross-dressers. The term is considered a slur by some transgender activists, such as Roz Kaveney. The Gay & Lesbian Alliance Against Defamation (GLAAD) state that the term is "usually considered offensive and/or defamatory" by members of the transgender community. The gay community is believed to have originated the term, and many members of the gay community feel the word is a term of endearment.
http://en.wikipedia.org/wiki/******_%28slang%29
So whilst you may not like it others do and being offended does not make you right