With fast user switching, when I login, 7 switches between the login screen and by desktop with a fade to black and back transition.

You would think that the logout would be the similar but in reverse. What it seems to do is fade out and back to the background of the login but with the words "logging out" displayed and a busy cursor.

The screwy part is that it then abruptly blanks the screen for ~5 sec and when it returns the login screen is visible.

I called M$, They tell me this is normal even on a clean install test machine.
The rep did admit that there is a problem where for some users the screen goes blank and does not come back.