I think this film was extremely well cast. Based on the setting and lifestyles of the characters, the actors in this film represented their characters the way they probably should have been. Hilary Swank was an excellent choice for the film, but I don't know that I agree that she was 'unknown' at the time. She had appeared in numerous television shows and movies prior to her portrayal of Teena Brandon, so its not like this was her first role. She was known, but she just hadn't made it to that upper tier until this role. Obviously casting Swank paid off as she won best actress. The film probably would have still been good without her in it, but she brought a certain believability to the role. As far as the other actors in the film, i really enjoyed Peter Saarsgard in his role. He projects a lot of life in his character. Its easy to feel both sympathy and anger towards him. He wasn't very well known either until recently as he has been in successful films such as Garden State and Flight Plan. Chloe Sevigny was also a good choice for her character. She portrayed the small town, trailer trash very well and the believability of these characters is what makes the film successful in my opinion.
I think that these actors had to be less known than others, yet had to have qualities of being a good actor. They also had to fit into the stereotypes of the characters. The casting was done extremely well. Hilary Swank's versatility is reflected and she does a perfect job of portraying Brandon in the film.