Apple Final Cut Pro 7 - Manual (Page 169)

Chapter 8 Adding Video Filters and Transitions 169
Key Concepts
Filter: Â A filter can change the look of a clip or be used to eliminate or mask out portions
of a clip. Filters allow you to create subtle or dramatic changes to a clip and, in the case
of color correction, make fine adjustments to give your movie a polished look.
Transition:
 A transition is a special effect used to give the change between two clips a
certain appearance. Final Cut Pro provides a variety of transitions that you can apply
to give your sequence visual appeal and continuity.
Handles:
 To create a transition, which requires Final Cut Pro to render or mix the frames
from two clips together, an outgoing clip must have extra unused frames at the end,
and the incoming clip must have extra unused frames at the beginning. Final Cut Pro
can then use these extra frames to create the effect that the transition requires.
Next, you’ll explore methods of outputting your movie for users to view.