I am using Visual Studio Online to deploy my project continuously after the CI build pass. However I have to use a publish profile to build the production web.config transfo
I had the same problem. I found that "Path to Deployment Settings" sets the MSBuild parameter "/p:PublishProfilePath". You can see this in the Diagnostic log of the build. I'm not sure what the PublishProfilePath parameter does though.
But I got transforms working a different way. In the "Build" section, I set "Configurations" to use the Release configuration. Publishing through VSO build seems to apply the transform for the config.