Custom Animation is a feature that contains a list of effects that you can
apply to objects to have them animate during the slide show. You can add them
through Slide Show > Custom Animation. (Or in PowerPoint 2007, click
Animation > Custom Animation). Also have a look at:
http://www.pptheaven.mvps.org/tutorials/CustomAnimation.html

Slide transition as the name suggests, allows you to add effects onto the
slides when advancing from one to another. So for instance, when you have
finished presenting on slide 1, you can have it fade smoothly to slide 2.