Transitional year programs are broader-based experiences with rotations in IM, surgery, peds, Ob/gyn, ICU, etc while prelim years in medicine are basically rotating through different medicine services and subspecialties and more intensive ICU/CCU experience. Transitional years tend to me more flexible about setting up electives to tailor your experience toward your selected career and tend to be a bit more competitive than prelim years in medicine (partly because there are fewer of them). I'm planning on doing a transitional year for PM&R and most of the applicants I met on the trail were either going into radiology, anesthesia, radiation oncology, derm, PM&R, etc. If you go into neuro you have to do a prelim year in medicine...most psych residents also do a prelim medicine year too.
Here's some more info on transitional year programs
<a href="http://ahme.med.edu/councils/ctypd/" target="_blank">http://ahme.med.edu/councils/ctypd/</a>