The video directed by Scott Valins is not as good as the song and is basically a stylized look at a girl becoming a guy and a guy becoming a girl. I, personally, would of loved to see a less stagey approach, maybe make it more filmic and taking place in real locations.
As I watched this video and listened to Andrew in Drag I could not help but think of the Kinks epic song Lola which traversed similar social logical terrain way back in 1970. While Merritt speaks of his adoration of Andrew in Drag in a direct matter of fact way, the protagonist in Lola went on more of a journey of self discovery as he realizes that Lola is a cross dressing man. This makes for a more interesting musical narrative, there is just more drama there and the particularly loving lyric (especially in the context of 1970 England) "Girls will be boys and boys will be girls. It's a mixed up muddled up shook up world except for Lola... Lo-lo-lo-lo Lola" - has always seemed to me, to be embracing the idea of feeling free in your own skin (what ever gender's close and fashion is adoring it) and the straight up morality in society embracing it.
Will society every embrace such forward thinking concepts? I don't know, we seem to take two steps forward and one step back. Hurrah to the Magnetic Fields for carrying on the good fight. Of making the prudes squirm in their seats. Will Andrew in Drag become a classic like Lola? I guess I really don't care- I can just envision Andrew in Drag and Lola holding hands and walking off into the sunset.