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Nesting didn't work for me. I found a known issue at:
Apparently others have encountered this problem. This description says changing the clip causes the black video. That has not been the case for me. All I need to do is apply the effect. Disabling the effect restores the video.
I reported this using the link tlc51369 provided (thanks).
I don't use Premiere transitions (AE is tool of choice) but it's really sad that this is also screwed up and Adobe has to spend time fixing this instead of working on the more major performance issues. At this rate when cs5 comes out in a year it's gonna even worse than cs4 was out of the box.
Diminishing returns. By the time Adobe gets the previous versions bugs ironed out they only have 6 months to work on the new version, then it'll be the same errors again most likely because they spent all there time on features like speech to text that only used by maybe 1% of editors.
I'd be more inclined to by a new version if it had no new features and worked fine out the box......for once.