I am so thankful that my friends are smarter/weirder/cooler than the average bear. It surprises me how many, even in queer or kinky circles, are totally resistant to the ideas that gender and sex are separate, and that neither is a simple binary.
Biological Sex is Socially Constructed:
Not only are there people who are, to some degree, intersexed (between 1:500 and 1:1600 depending on how you define it)--but most people have at least some characteristics that are commonly associated with the opposite sex. Men who are short, women who are hairy, men who have low testosterone, women who have deep voices... and yet, society seems to expect people to not only fit neatly into one of two artificial boxes, but once there to hold be able to manifest every element on the list of that box without having characteristics of the other.
"In real life literally millions of people have bodies that are in some way contrary to the biological concept of the two sex system."
Then, you get to gender. And so many people can't even wrap their minds around the fact that gender does not equal genitals. Do we look in people's pants or perform a hormone panel before deciding whether to call a person he or she? We rely on a combination of secondary sex characteristics, and presentational and behavioral cues. Gender is, more than anything, performative. It's how we show ourselves and how we act. (Here it's useful to distinguish identity from presentation... but I'm not going to get into that right now.)
I am the most confusing of all possible gender identities. I am gender fluid. Our language and culture are really lacking when dealing with sexuality and gender--and this one really stumps 'em.
Mostly, though I identify as Queer. It's much shorter than saying I'm a pansexual gender fluid sadomasochistic leather switch.