Apple Final Cut Pro 7 - Manual (Page 545)

5 If you do an overwrite edit, you’ll see that your clip, defined by the In and Out points in
your sequence, has been edited into the sequence.
The new clip fills the gap.
Example: Backtiming a Clip into Your Sequence
Instead of editing a clip into your sequence using clip In and Out points in the Viewer
and a sequence In point in the Canvas or Timeline, you can edit clips using only an Out
point in the Canvas or Timeline. This is called backtiming a clip. You can use this method
when you want to make sure a particular frame of a clip ends at a specific point in a
sequence. In the resulting edit, your source clip’s Out point is placed at the Out point you
set in your sequence, and the rest of the clip appears in your sequence before this point,
to the left.
To edit a clip into your sequence using only an Out point in the Canvas or Timeline
1 Double-click a clip to open it in the Viewer. (This is your source clip.)
2 Specify In and Out points for the source clip in the Viewer.
Out point
In point
545 Chapter 36 Three-Point Editing