Hi Linda, Regarding BLAST usage: you can download local blast from here: http://blast.ncbi.nlm.nih.gov/Blast.cgi?CMD=Web&PAGE_TYPE=BlastDocs&DOC_TYPE=Download
available databases can be found here: ftp://ftp.ncbi.nlm.nih.gov/blast/db/
most probably you would like to run blastx against nr, or you can download uniref90. I suggest to use tabular format for output (saves some time and space). You can filter out obtained results by alignment length and /or E-value smaller than -5 (for example).
the length of alignment is additional filter, if you get to many results using e-value cutoff only, you can stringent your filter by filtering out to short alignments, query coverage etc.
Your data, your goals, your filters.
Just for example: you have transcript-Y 2kb long, after BLASTX you got hit with 1e-7 to X-protein and alignment length was 200bp with several indels, can you conclude that transcript-Y is X-protein?
What will be your filters for reliable annotation in that case?