The problem: English lacks a commonly used gender-neutral personal pronoun. Also, sometimes people switch pronouns.
There used to be a singular "they" for unknown individuals. Shakespeare used it. It's making a comeback, but it's imperfect as it's never used to refer to a person that you know. There are a punch of proposed gender neutral pronouns (GNP), including Spivak and my favorites: ze and hir: "Ze laughed. I called hir. Hir head hurts. I am hirs. Ze feeds hirself." Of course, the way to get things into common usage is to use them.
Ok, so what about people who change pronouns? Obviously, the solution is to refer to them the way they wish. If you don't know what you're supposed to use, go with a GNP.
Then, there are temporal issues. I know some folks who have transitioned. Some I only knew afterwards, but know stories about them that are from before. I usually tell those stories with the pronoun that I've always used. "When she was a boy, she went to math camp." Then, there are folks I knew before they came out. I use the pronouns that matched them at the time of the story. "She was a Mills student then, but now he's at UCLA." If I'm talking about a public figure or writing academically, I'll use the current pronoun. "Wendy Carlos was still known as 'Walter' when she released Switched on Bach." I can't imagine a situation where using the most recent pronoun would be in error.
For myself, I prefer male or gender-neutral pronouns. Since I haven't really changed appearance much, I think it would be unfair for me to get annoyed when old friends refer to me as 'she.' Mostly, it doesn't bother me, but sometimes it's like fingernails on chalkboard. I feel so much more comfortable with being 'he' or 'ze' that my tolerance of 'she' is declining. I mean, imagine if everyone referred to you for a day by the wrong pronoun. That would be really weird and uncomfortable, right?