If you get a nasty Error about "Download error" in your Download Folder, is because you need to setup proper username/group permission. By default, transmission uses the group and the user called "debian-transmission".
Let's say download directory is /home/username/downloads.
sudo usermod -a -G debian-transmission username
where username is your username. with this command you are being added to debian-transmission group.
sudo chmod 0770 /home/username/downloads -R
this will set the owner and the group users to read/write/execute on this folder.
sudo chgrp debian-transmission /home/username/downloads -R
chgrp will change recursively the content of download folder to group "debian-transmission"
