I would have to disagree with Damago. I edit with the software all the time. I do complex, multitrack editing with effects. I edit native AVCHD and Canon DSLR MOV HD footage. I use 18megapixel images (from the Canon) and finish everything I start.
Are there problems? Yes. But there are problems with every software out there. I export to file (MPG4 1080P) and upload to my youtube channel. Many out there are using the software producing amazing results.
Because someone does not know how to use the software, nor has bothered to read the manual or watch the easy to follow online video tutorials that Pinnacle offers to everyone (professionally produced by ClassOnDemand) is not the software's fault. Reading your post, you mention looking for a simple fade to black in the transitions. You don't have to "look" for it. Easy to apply and do.
The behavior might be "typical" on your machine, but not mine. I have the video evidence to prove it and can point to many others publishing their work.
Have you tried the Pinnacle user forums?