Sexual Labels

I've always been confused by sexual labels. Is a person gay because of their desires to be sexual with a person of the same sex or because of the person engaging in same sex sexual activity?

If sexual orientation is based on the "act" of having sex with a person of the same sex then I would say that:

I'm a practicing Homosexual and an non-practicing Heterosexual.

If sexual orientation is based on the "desire" to have sex with a person regardless of their gender then I would say that:

I have no sexual attraction to women (that I'm aware of) but I would be willing to have sexual activity with a female.

After all, sex can simply be a physical act like giving a person, regardless of the gender, a massage...the difference is that it involves the genitals.

Simply put, my natural desires are to be with a person of the same sex but I'm willing to engage in heterosexual sexual activity...