A transitional year is a one-year program that some specialties (anesthesiology, dermatology, others I can't think of off the top of my head) require prior to starting residency. So for someone in Anesthesia, you spend your intern year/first year in either Internal Medicine or Surgery, and then move into your official Anesthesia residency. Since the program isn't necessarily connected to your residency, you have to match for residency AND a transitional placement. They can be at the same hospital/program, but don't have to be.