I don't use Pinnacle studio so I can't be too specific, but your questions are quite general so I should be able to help. Your Project settings need to match your footage, I'm guessing your shooting either 1280x720 or 1920x1080 and the Codec is H.264, so your project settings need to match, I'm not sure if it's like final cut pro where it will change the settings automatically to match your footage but if not then you'll have to do it yourself depending on the resolution your shooting in. Also I don't know if Pinnacle handles the H.264 codec too well as I know some video editors like Final Cut and Avid don't respond too well to it so you may have to convert it to something else using a conversion software. I'm guessing your transitions aren't showing up because it needs rendering, have a quick look through your manual or google it and it will tell you how to render your footage. Hope this helps.