I've been experiencing some 'buggy' audio behaviour too, mostly with some audio adjustments not actually sticking. Normally when I close iMovie down and re-open, repeating the adjustments seems to work. That said, it's been a week or so since I've had these particular issues. I made a new copy of my project and have been working off that recently, so maybe that helped?
I have not had problems fading in transitions, although my transitions are pretty short on the whole and I have not really been trying to time my fade with the transition. But given some of the audio bugs I've experienced I'm not surprised to hear your issues.
I also posted this earlier about how to build longer audio fades. I built one last night that is about 8 seconds long with a series of 2 second muted sound clips that ducking the music to 80%, 60%, 40% and then a manual 2 second fade. Pretty quick and easy once you get the hang of it, albeit a clumsy solution. If you want to keep the video sound at 100% you will have to do it splitting the video into 2 second segments and duck the music from the video audio adjustment.
http://discussions.apple.com/thread.jspa?messageID=8930465�
bit-part