From: Shambolic Walkenberg
I'm firmly in the camp of it does matter when it comes to rl gender (far moreso than sl gender if I pause to think about it), so I'd say tell them.
You're right, but that's not the "only right".
IMHO, it's fine to play an av that doesn't match your RL sex any way you see fit, as long as it's engaged role play and not intentionally deceitful. If someone wants to experiment with walking the other side of the street, well, good for them: SL is the perfect place for it.
To clarify: People shouldn't assume anything about your RL that you haven't said or pretty clearly implied (in your RL tab or conversations explicitly about RL). If they do, it's their bad, not yours. You're entitled to play a role to your heart's content, as long as it's not fraudulent.
Note that I'd say that guys who av-up as girls, seduce or get seduced by women at women-only places, and then say "haha, fooled you", are being fraudulent. Men who are honestly playing a lesbian female character are not. Yup, there's a fuzzy line between these.
The fully honest approach is laudable. However, I find it a bit of a buzz kill to learn that the hot vixen I'm chatting up is actually a fat bald old man living in his mother's basement. (I consider that a weakness of mine, but I can't deny I'm that way.) So, I prefer the "don't ask don't tell, unless you really want to know" approach.
When I feel like sharing my RL side, I offer it (either as conversation about RL or maybe a pic), and leave it to my playmate offer likewise or not. If she doesn't, I prefer to assume it's because she's a world famous supermodel.

I know a number of guys who were quite upset to find that their lovers weren't actually RL females. Understandable, but if they care, they should ask. If asked, you should either answer honestly, or refuse to answer.