Apple Final Cut Pro 7 - Manual (Page 531)

The clip overwrites all items on the destination tracks from the playhead position through
the duration of your edit. No items are moved.
Before an overwrite edit
New clip overwrites
existing clips.
After an overwrite edit
Performing an Overwrite with Transition Edit
The overwrite with transition edit is a quick way to do an overwrite edit that includes a
transition between your new source clip and the clip before it in your edited sequence.
When you first install Final Cut Pro, the default transition is a 1-second dissolve. For more
information on how to choose a new default transition, see
“Changing the Default
Transition.”
An overwrite with transition edit is exactly the same as an ordinary overwrite edit, but it
places the default transition into your sequence, centered on the edit point.
A B C
C A
D
D
Before edit
After edit
531 Chapter 36 Three-Point Editing