Step 1: Variable oxidation states.
Transition metals show many oxidation states because the energies of \( (n-1)d \) and \( ns \) electrons are close. They can readily gain or lose electrons, forming intermediates and providing an alternative reaction path of lower activation energy. For example, in the Contact process \( V_2O_5 \) cycles between \( V^{5+} \) and \( V^{4+} \); Fe in the Haber process cycles between oxidation states.
Step 2: Formation of unstable intermediate compounds.
They form loosely bound intermediate complexes with the reactants, bringing the reacting molecules together and lowering the activation energy; the catalyst is regenerated at the end.
Step 3: Large surface area and adsorption (heterogeneous catalysis).
Transition metals like Ni, Pt and Pd have partially filled d-orbitals that adsorb reactant gas molecules on their surface. This increases the concentration of reactants at the surface and weakens the bonds within the reactant molecules, speeding up the reaction (e.g. hydrogenation of oils with Ni).
Step 4: Ability to form complexes.
Vacant d-orbitals let them form coordinate bonds with reactants, activating them.
Conclusion: Variable oxidation states, formation of intermediate compounds/complexes, and the adsorbing power of partially filled d-orbitals together make transition metals and their compounds effective catalysts.
\[\boxed{\text{Variable oxidation states + adsorption + complex formation}}\]