I'd have to say this is one of my favorite movies. I first saw the off Broadway musical in NYC and loved it so much that I immediately went out and bought the soundtrack (which is rare for me)! John Cameron Mitchell wrote, directed and stars as Hedwig in this adaptation of his long-running stage play. The premise of the story is that a boy named Hansel meets and falls in love with an American soldier in Berlin. In order to bring Hansel back to the US with him, Hansel becomes Hedwig via a botched sex change operation.... hence, the angry inch. Hedwig than travels around the US performing a stage show, in spite of the poor response.
Netflix categorizes this movie as "Gay and Lesbian". I disagree, even though Hedwig does happen to be gay. I'd have to say I would categorize it as Rock Musical. I thought the movie was amazing. They did such a good job adapting the play to a movie and the music is fantastic. The story is great and I fell in love with the character of Hedwig. I had so much feeling for him and really cared about his happiness.
If you ever get a chance to see the live production, I would highly recommend it. If not, I would definitely rent the movie on DVD. I've seen the live musical, I saw it at the theatre and I've watched it several times at home. I also listen to the soundtrack frequently.
I agree that Netflix classification is somewhat limiting. I doubt they classify the Rocky Horror Picture Show, and I'd say Hedwig is gay/lesbian in the same way.
I also loved this movie, but the stage production was truly a blast. The soundtrack is fantastic.
Bit of trivia: Apparently Ally Sheedy, of 80's Brat Pack fame, played Hedwig for a while in the stage production. I have to admit, that kind of blows my mind.