Apple Final Cut Pro 7 - Manual (Page 450)

However, if you set In and Out points in a sequence and an In point in your source clip,
the Out point of the source clip is determined by the duration between the sequence In
and Out points. In this case, the sequence In and Out points limit how much of the source
clip is placed in the sequence.
(3) Clip In point
(4) Clip Out point
(inferred)
(1 and 2) Sequence
In and Out points
For more details about three-point editing, see “Three-Point Editing.”
Determining What Parts of Clips You Want in Your Sequence
To specify what part of a clip you want in your sequence, you open it in the Viewer and
set In and Out points. The In point is the first frame of the clip you want to use in a
sequence, and the Out point is the last frame. For information about setting In and Out
points for clips, see
“Setting Edit Points for Clips and Sequences.”
If you like, you can also add an entire clip to your sequence, without setting In or Out
points for it. For information, see
“Dragging Clips to the Timeline.”
Instead of adding clips to your sequence one at a time, you can organize a group of clips
in the Browser and drag all of them to your sequence at the same time. For information
about adding groups of clips directly to your sequence, see
“Preparing a Sequence Order
in the Browser.”
Preparing a Sequence Order in the Browser
You can sort clips or visually arrange them (using icon view) in the Browser and then drag
the sorted group of clips to the Canvas or Timeline to instantly edit them into your
sequence in the arranged order. It’s not necessary to arrange a sequence order of clips
in the Browser before moving them into a sequence, but the techniques described here
can save you some time.
450 Chapter 31 The Fundamentals of Adding Clips to a Sequence