I do not think it means what they think it means. From my column on Obama supposedly transcendent powers:

Transcend means “to move beyond, to surpass.” At least that’s what I always thought. But I’m beginning to wonder whether it means instead: “Much, much more of the same, only this time really stupid.”
Exhibit A: the incessant, relentless, click-your-ruby-red-slippers-and-say-it-until-it-comes-true mantra that Barack Obama will magically cause America to “transcend race.” One hears and reads this everywhere, but less as an argument than as a prayer, an expression of faith, a “from my lips to The One’s ear” sort of thing.
It is, of course, total and complete nonsense. According to L.B.O. (Logic Before Obama), transcending race would involve making race less of an issue. Passengers on Spaceship Obama would see race shrink and then vanish in the rearview mirror.
Instead, Obama has set off a case of full-blown race dementia among precisely the crowd that swears Obama is leading us out of the racial wilderness. Rather than shrink, the tumor of racial paranoia is metastasizing, pressing down on the medulla oblongata or whatever part of the brain that, when poked, causes one to hallucinate, conjure false memories and write astoundingly insipid things. For instance, a writer for Slate sees racism when anyone notes that Barack Obama is — wait for it — skinny. What this portends for Fat Albert is above my pay grade.

Update: From a reader:

Subject: And on CNN tonight…
“Even conservative thinkers of the National Review are inspired by your vision of a nation where we, and I quote, “unite as one people, one nation, one American family and transcend all of our misgivings.”