It would appear that you can't put transitions between clips in the secondary timeline, is there a way to do this?
I know I can use position tool to plonk it down but that's not the point, there was a reason why I needed to do it this way and in the end I went with cuts instead of dissolves! luckily it worked.
Final Cut Pro X, Mac OS X (10.7.5)
The first statement is wrong. Don't know what you're doing but you apply transitions in secondaries the same way you do in the primary. No idea what the position tool has to do with it. You select the edit point in the secondary and double-click the transition you want or press Cmd-T for the default. The clips do have to be in line and adjacent to each other, but that's the same in any storyline or any NLE for that matter.
Not sure if you really mean secondary storyline or just the clips you connected to the primary storyline. In that case select the connected clips you want to put the transition on and create a secondary storyline by pressing cmd + g.
I think the other answers have pretty much nailed it - but just to confirm in point form:
Transitions in secondary storyline
