I use it for myself as I have no other word that really "fits" me. Trans is close enough, but even then it doesn't really cover the full spectrum of what I am. Since it's hard for me to define my ever-evolving sexuality, and since my gender identity is a bit fluid (though mostly on the trans masculine side), it's hard for me to say "Oh, I'm trans" or "I'm gay/bi/etc". Because one word doesn't really cover it. I'm trans, and that's that, but because I'm trans my sexuality is so very hard to define (especially since I'll probably never transition... I'm not straight as I'm not a woman, but I don't feel gay as I'm not a cis man and feel weird claiming that word... then again, I am still somewhat attracted to women, too?). See, very confusing. So, queer seems to work.

I would never call someone else queer unless that was the label they themselves used. The same way I would never call someone gay, dyke (I know many lesbians that have reclaimed that one), transgender, transsexual, lesbian, etc unless that was the label they chose. Only we can choose our labels.