There is strong evidence to indicate that in some (many?) cases, the cause can be developmental, i.e. a result of various effects while in the womb.
To quote from Wikipedia to summarize the theory:
The hormonal theory of sexuality holds that, just as exposure to
certain hormones plays a role in fetal sex differentiation, such
exposure also influences the sexual orientation that emerges later in
the adult. Fetal hormones may be seen as the primary determiner of
adult sexual orientation, or a co-factor with genes and/or
environmental and social conditions.
A BBC Article from 2006 reports on a study published in the journal of the Proceedings of the National Academy of Sciences.
"These results support a prenatal origin to sexual orientation
development in men."
He suggests the effect is probably the result of a "maternal memory"
in the womb for male births.
A woman's body may see a male foetus as "foreign", he says, prompting
an immune reaction which may grow progressively stronger with each
male child.
The antibodies created may affect the developing male brain.
A 2010 paper by Dutch researchers seems to advocate that homosexuality is developmental rather than environmental or genetic.
The fetal brain develops during the intrauterine period in the male
direction through a direct action of testosterone on the developing
nerve cells, or in the female direction through the absence of this
hormone surge. In this way, our gender identity (the conviction of
belonging to the male or female gender) and sexual orientation are
programmed or organized into our brain structures when we are still in
the womb. However, since sexual differentiation of the genitals takes
place in the first two months of pregnancy and sexual differentiation
of the brain starts in the second half of pregnancy, these two
processes can be influenced independently, which may result in extreme
cases in trans-sexuality. This also means that in the event of
ambiguous sex at birth, the degree of masculinization of the genitals
may not reflect the degree of masculinization of the brain. There is
no indication that social environment after birth has an effect on
gender identity or sexual orientation.
I can't access the full text of the paper so I don't know from what basis they draw their conclusions. However the paper is cited by a few reputable sources and was peer reviewed.
There is evidence of a very strong correlation between finger lengths and sexual orientations. To quote from a BBC article paraphrasing a 2007 study:
We can be pretty sure from a large number of human and animal studies
that digit ratios are affected by prenatal testosterone exposure. So
this result suggests a link between the hormones a baby is exposed to
in the womb and their sexual orientation in adulthood.
While we don't know the full range of factors that can cause or contribute to determining a persons sexual orientation, there is certainly good evidence to indicate that prenatal development and foetal hormones play a key part in many or perhaps even most cases.
Is homosexuality (meaning an instructive same-sex sexual attraction) always or generally innate? We don't know. Can homosexuality be innate? Almost definitely.
Other related studies and areas of research:
A 1974 study which has been widely cited since found that homosexual men tend to have higher levels of testosterone than heterosexual men.
Homosexuality in males is often linked to fraternal birth order, with the theory supposing that there is a maternal memory of sorts which builds up an immunity to a male foetus and the response can lead to homosexuality.
The Wikipedia page on Prenatal hormones and sexual orientation has a good summary (although poorly formatted) with links to many relevant studies.
