Quicken 2004 for Mac- I'm setting up a budget with line items for
saving account transfers (for example, a budget item for vacations,
one for a house down payment, and one for monthly investments). Do I
treat these items as Expenses or should I track them as Transfers? If
its a Transfer, can track categories of a transfer (ie, $100 to
vacation, $250 to down payment, and $50 to investments)?

I am just starting to use Quicken (not tracking any accounts yet), I
understand the basics of budgets, and I'm computer literate. I know
how to add and delete categories and use the basuc features of
Quicken. The best answer will have a discussion on what
Expenses/Transfers mean and how they theoretically relate to budgets. 
A step-by-step process for setting up Expenses/Income/Transfers in
Quicken would also be helpful.