I was suffering from what I think is the same problem with interpid
8.10, but followed the advice here to get the latest version of
Transmission:

http://forum.transmissionbt.com/viewtopic.php?f=13&t=5604

First edit the config file with a command like this:

gksudo gedit /etc/apt/sources.list

Then add the appropriate lines (here 'intrepid' = 8.10 version etc) to
the end of the file:

deb http://ppa.launchpad.net/transmissionbt/ubuntu intrepid main
deb-src http://ppa.launchpad.net/transmissionbt/ubuntu intrepid main

Save file then exit editor. Then add the keys with these two commands:

gpg --keyserver keyserver.ubuntu.com --recv 976b5901365c5ca1
gpg --export --armor 976b5901365c5ca1 | sudo apt-key add -

Then start the System -> Administration -> Software sources and I un-
ticked the new entry in Third Party Software for the transmission source
(did not need it anyway) then on 'Close' it updated the package lists
and then the orange star appears (top task-bar right hand side) with the
option to update the version of the Transmission BitTorrent client. That
now seems to work fine.

I also edited the basic settings to make it more friendly to my ISP's
<cough> "fair use" policy by configuring as follows Edit -> Preferances:

Torrents (change to dedicated directory, not Desktop, for output)
Peers (enable block list, change to "encryption required")
Speed (enable speed limit mode 8:30 to 21:00 with down=20k & up = 15k)
Network (incomming post checked / enabled in router for forwarding)

Hope this helps.

-- 
"Add a torrent" file dialog unusable
https://bugs.launchpad.net/bugs/292517
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