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I had formatted my HDD. Did a clean install of Vista ultimate 64 bit OS.
Installed VS 11.5,content pack,27 MB patch,54 MB patch all in a sequence. Now Album transition does not work. When I insert any Album transistion
I get accordian bellow transistion,ie., the video 1 folds towards left to reveal the next clip.

When you reformatted your HDD, and reinstalled Vista did you also update your DirectX ?

After reinstalling your OS, and running Windows update, will not install the most current version of DirectX. This must be done manually from MicroSoft's website.

Problem solved. Thank you