Simple answer, you need to reduce the resolution of the playback on your computer. This change affects only what you see as you play the movie in MEP, it does not affect the resolution/quality of the final output, whatever that may be. Essentially, the problem is that you are wanting your computer to process for playback a fade or transition at the same time as continuing to "stream" the rest of your video footage; many computers, whatever their spec, struggle with that!
I don't have MEP 2013 so can't tell you exactly how to change your settings for lowered resolution. In earlier versions of the program it was a setting under File>Settings>Movie>Video/Audio>Movie Display, where you can choose from Full, Half, Quarter or Low. I don't know whether MEP 2013 includes one very useful feature first introduced in VPX5, which is a setting which allows playback "problems" similar to yours to be resolved by means of various changes, such as reduced resolution or reduced framerate or disabling transitions etc., all of which are accessible via a small "lightning flash" symbol below the monitor screen.
Thank you Jeff.
I have now tried to lower the preview resolution in the file menu. But, it's not still working.
Well, I'll keep on trying. I am new to the MEP 13. Have been using all the Photostory versions since 2004 - without these difficulties.