We've received a few reports of problems with audio when using transitions in iPhoto 4. MacFixIt reader Larry Bickford seems to have found a solution that works to resolve the issue in most cases:
"The audio errors are created when adding transitions. The problem is caused by multiple or legacy .plist pref file, most often iMovie 3.0.
"The fix is to delete the file com.apple.iMovie3.plist, quit and restart iPhoto, then re-render the transitions."