Well, one thing is to use transitions effects and another one is that your video jerks when previewed in Premiere's timeline. I didn't mean that using transitions is bad, it's only that in my eyes it looks like cheap stuff. It's just my opinion, not a rule
About the jerky stuff, try to preview your video inside Premiere or just export a small bit if you want to see how the final product looks like. And one more thing
do not use divx files for editing in Premiere. Premiere + DivX = bad (and this may be why your video skips inside it)
You should never underestimate the predictability of stupidity.