I have exactly the same problem. The Movie Maker 2 quits every time I click on a transition or a video effect. I downloaded and installed the newest ATI Radeon drivers. It did not help.
Relatively easy to fix...just did it myself. You have a dll file that is in your system that is confusing the program. Find it (use previous post and it will tell you where to go) and rename the dll (I used my own name so I could find it again easy enough) and then try restarting the program.