The Transcoder AddOn only works on live streams. I remember to have read an article once about how it was possible to trick Wowza and run VOD streams through the transcoder. If I find that article again, I'll post a link to it here.
However, since transcoding generally is a CPU-intensive process, you won't be able to serve many streams simultaneously (maybe up to 10 concurrent streams on a medium server, dependent on the transcoding template and CPU capacity). It's highly recommended to transcode the streams into various bitrates and save the separate files, then serve the VOD eg. through a SMIL file.
Please feel free to contact me if you need any help with the setup and configuration of your Wowza solution. As an independent consultant with years of experience with streaming video and Wowza, I'll be glad to help you.