See also transcoding
A transcoder is a piece of computer software that translates between different types of file encoding. There are hundreds of different programs that do it, and they're used for many types of files, including video, audio, and text. They function as size compressors, for compatibility, and as storage and backup tools. They have industrial, commercial and also personal uses, but probably their most well-known function is in the viewing and storage of audio and video entertainment. Hardware transcoding equipment also exists, for instance a device that rips tapes (or records) to CDs.
Think Babel fish for computers, only a lot slower, more limited (most only handle a few formats) and expensive. Still, if you've got something encoded one way and you need it in another, you're lost without 'em.
While legal, transcoders are quite fiercely hated by the audio and visual media distribution monopolies. There is a conflict between the Internet age and their business model: If they are to continue making their profit by taking 90% or more of the artist's income, they must remove some fair uses of their product that are currently permissible to users, such as making back-up copies, loaning to friends, and transcoding between media, among others. It remains to be seen how this conflict will be resolved.
Of course it could also mean "transvestite computer geek", but I've never met one of those, and to be honest, I'd be surprised if they exist. Why would you bother dressing as the opposite sex if you're never going to leave the house?