In a power system, the analysis of transient signals is the theoretical basis of fault diagnosis and transient protection theory. Shannon wavelet entropy (SWE) and Shannon wavelet packet entropy (SWPE) are powerful mathematics tools for transient signal analysis. Combined with the recent achievements regarding SWE and SWPE, their applications are summarized in feature extraction of transient signals and transient fault recognition. For wavelet aliasing at adjacent scale of wavelet decomposition, the impact of wavelet aliasing is analyzed for feature extraction accuracy of SWE and SWPE, and their differences are compared. Meanwhile, the analyses mentioned are verified by partial discharge (PD) feature extraction of power cable. Finally, some new ideas and further researches are proposed in the wavelet entropy mechanism, operation speed and how to overcome wavelet aliasing.