Step 1: The general form of the equation of tangents to the circles.
We have two circles:
\[
x^2 + y^2 + 2x + 2y + 1 = 0 \quad \text{(Circle 1)}
\]
\[
x^2 + y^2 - 2x - 2y + 1 = 0 \quad \text{(Circle 2)}.
\]
For the transverse common tangents of these two circles, the equation can be given as:
\[
(x_1 x_2 - y_1 y_2) = 0,
\]
where the centers of the circles are \((h_1, k_1)\) and \((h_2, k_2)\). After simplifying, we get:
\[
xy = 0.
\]
Thus, the equation of the transverse common tangents is \( xy = 0 \), which corresponds to option (2).
Hence, the final answer is \(\boxed{xy = 0}\).