It's my understanding that the clitoris isn't just the head at the top of the boat, but continues inside a woman's body. There is erectile tissue and a shaft, it's just below the surface. When a penis (or sex toy) moves in and out of the vaginal tunnel and puts movement and pressure on the upper wall, it's putting that pressure and movement on the bottom of the whole clitoris, which I would imagine has a similar effect as that type of movement might have on the penis of a man or transgendered individual.
Then again, this isn't really my area of expertise. All I really know is that I've seen the effect of g-spot stimulation first hand on women and it would seem to exist.
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