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It may be that your photos don't have a long enough duraton for the transition to render properly. Try this: double click on a photo, a dialog box will appear. In the dialog box change the time of the clip's duration to accomodate the transition length. Close. This will lengthen the time the photo stays on the timeline. Choose the next photo and repeat the process. Now try the transition you had wanted to apply. It should work.
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