While this ad for the 2006 festival (which recently resurfaced on YouTube) was undoubtedly meant to be edgy and funny, it's belittling and reinforces stereotypes that all trans people are prostitutes. The key is that we're not laughing with the lawyer/hooker, we're meant to be laughing at her.
And yeah, it hurts more when it comes from folks who undoubtedly would be horrified at equivalent humor aimed at minorities. Do you think they would've done an ad showing a black lawyer who moonlights as a crack dealer? Or a female attorney who moonlights as a hooker? I thought not.
The truly sad thing is that the ad's joke about jaded New Yorkers could have just as easily been accomplished with a positive portrayal (and just a few minor changes in the script). For example, the crossdressing lawyer could have been out for a walk with her wife, who she introduces to the the mother with her kids, who's just as blase about it all.
OK, maybe I'm being humorless, but having two trans people (Cameron McWilliams and Simmie Williams) and a gender-variant kid (Lawrence King) who might (or might not) have later come out as trans gunned down in apparent hate crimes within less than a month kind of leave me not in the mood for this sort of "humor."