Kdenlive 0.7 does not have a video crossfade/dissolve transition by default.
You can either use a "composite" transition or a "luma" transition to achieve a crossfade.
For a luma transition, just use one that "looks right". With composite, you can get a real crossfade/dissolve by applying a composite transition, then add a keyframe to the end of the transition and set its opacity to 0.
For some more discussion of the composite transition, please see mantis issue 261 .