Transitions are the visual effects that take place between photos during a slide show. The transitions help smooth out the presentation because jumping from photo to photo without transitions can look harsh. iMovie offers many different kinds of transitions that can be as simple as a fade-to-black transition between photos, to a ripple effect that looks like pebble being dropped into a pool of water.
Even though it is tempting, I caution against going wild with the transitions. Too many fancy transitions can be distracting and make the slide show look amateurish.
iMovie gives you the option of starting each movie with uniform standardized transitions. I highly suggest selecting that option. If there are a few photos that could use the extra punch of a 'fancy' transition then go ahead and add it separately. Just be forewarned that once you add a transition that is different than the initially standardized transitions, you need to manually add each transition from that time forward because iMove will turn off the standardized transition function.