now i'm working since 1 year with premier and i never had problems with transations.
in my last movie project i'm working with AVI files. now if i want to work with transitions (doesent matter if from premier by himself, or from other programs) the movie before the transations is still visable until half the transation passed. the alignement is on "center at cut". i also tried to change the modus, but it just makes it worse.
If you apply a transition across a join of two adjacent clips on a single track, you must make sure that there are enough spare frames (handles) in both clips for the transition to create an overlap for the duration of the transition.
By the sound of it, you are using the physical end of a clip which leaves no handles for the transition to operate on.
Double click the transition on the timeline and examine the geometry in the Effects Controls window.