I'd like to expand a bit on what you said, with the hope that Peter1985 will read on.
What we call transitional forms are not necessarily on the direct line of descent to today's species and it can be hard to tell for the vast majority of fossils. What they do retain are the traits that we recognize as being the primitive and derived features we expect to see in a transitional species since they likely diverged from that direct line or from species close enough to the direct line that they retain many of those features. They are the "cousins" on the family tree.
Actually my only point was that (to me) I think most "transitional" fossils are up for interpretation aren't they? Can the fossils be labeled transitional with 100% accuracy? That was my point. Maybe they can, maybe im just ignorant of the process of establishing which fossils are in transition and which ones arent. If there all in transition how do they know where to place them? I assume it's like a puzzle that you have no picture of and trying to fit the pieces in the best you can.
As Coyote said, we do interpret most fossils when determining which are transitional to which descendents. Evolution is messy and can make creating a clear picture of evolutionary paths difficult. We can tease out a clearer picture on certain paths because we might have fossils which show a clearer evolutionary relationship, such as with whales and with horses. That is why you see them used as explanations of what transitional forms might look like. That doesn't mean that we can say with 100% certainty which each fossil species was on the direct ancestral line to today's species, but they do represent what a transitional form should look like.
We expect that a transitional form will have a certain degree of ancestral and derived traits. The more ancestral traits versus derived, the older the fossil species is likely to be. (That isn't to say that we don't find living species today that retain many ancestral features, such as Horseshoe crabs and the coelacanth, which is why they are sometimes called "living fossils") Species that might gone extinct and not left any descendents still likely had a common ancestor with a species alive today. It therefore retained some features that are shared ancestral traits. Even if we didn't have a fossil of the direct ancestor, we can develop a good picture of what the direct ancestor might have looked like, because of those ancestral traits retained by the "dead ender". From this information we develop our best idea of what a tree of ancestry (phylogeny of species) might look like. We also use DNA but that is a different story.