Update: LiveJournal has rolled back the relevant changes and sent letters indicating these changes would never have been allowed to go live.
If you haven't heard yet, synecdochic has pointed out that LiveJournal is changing their codebase to make the gender field mandatory at account creation. http://synecdochic.dreamwidth.org/366609.html
I've been asked if the code really does what's being reported, and I'm starting to see a fair amount of speculation about what it does and what it will do, so I'm going to go over the changelog entries which seem relevant myself and report back on what I find.
Caveats
I do not have a strong working knowledge of the LJ codebase. I'll be working off diffs, and things could easily have unexpected interactions [I've already found one change that doesn't do what its comments say].
I'm only looking at changelog entries in the last 5 days which have the word 'gender' in the title.
Ok, here we go...
Account creation wizard only has two options: "Male" and "Female". Input verification [attempts to] requires that one of these options be selected 1, or gives error "Gender must be specified". 2
Code was provided to allow a user to specify whether to display your gender [with friends-only, nobody, everybody type permissions] in your profile, but that code appears to have been removed. I'm sorry, but I'm too lazy to check the diffs against each other to see what remains of it.
I see no change to the display routines [so it looks like behavior will remain the same as it currently is for whether gender is displayed in your profile....I think that's never?]
I see nothing which clearly affects editing existing profiles, though this code might apply. If it applies, that means you'll be able to change your gender later, but existing account holders will have to select a gender the next time they edit their profile. If it doesn't, that existing code [which doesn't yet have a change applied] would allow all users to change their gender, including back to unspecified, through the profile editor. This is where my lack of deep knowledge of the codebase is particularly problematic. Basically, I'm not sure what will happen, and they may introduce further changes down the road.
TLDR: I'm not 100% certain, but my code browse suggests this forces only new users to select a gender. I'd anticipate an upcoming change to force existing users to select a gender at next profile edit, if this doesn't do it. I believe you will still be able to change your gender in your profile, unless they decide to add some extra Fail.
Edit: If it's not immediately apparent to you why this is a bad thing, well, I don't have the energy to explain it right now. rm does an excellent job at http://rm.livejournal.com/1770434.html.