I've just completed my third compilation of still photos and videos in iMovie 11 (the latest one being 30 minutes long) and am still frustrated with the transitioning process but have found a workaround that helps to mitigate the problem.
First, I make sure transition setting is "All-Maintain Clip Range" rather than "Half-Maintain Project Duration."
Next, especially if I'm using a soundtrack, I find the transitions to be more finicky so I often will build the stills/vid clips with transitions first then add the sound track at the end. And I always make sure the sound track is not "pinned" since this also seems to create more problems. Then I go back and nudge stills/transitions/video clips to be timed to the soundtrack.
If the transitions and stills are being particularly stubborn' I will place a "title" block at the end of the compilation and set its duration to anywhere from 3 to 5 minutes. This lengthens the overall time of the piece so that the transitions aren't so stingy with allowing the length of transitions I'd like. The end "title" block doesn't contain text and is just a plain black screen.
These are my little tricks that seem to work for me. Hope I've explained them clearly enough!