I am having the same problem with creating and editing the Photoshow. In the past I have been able to add various mp3 to a show creating a transition in music. I am not able to do it now, as I have tried starting over with new Photoshow a couple times. The feature is simply not there.
I don't believe it is windows issue. Maybe something missing since the PS upgrade. I noticed it has a 50MB limit for music.
Please let me know if there is something I am missing.