Apple Final Cut Pro 7 - Manual (Page 547)

To edit a clip into your sequence that has no specified In or Out points
1 Double-click a clip to open it in the Viewer, but don’t set In or Out points.
No In or Out point
is set.
2 In the Timeline, move the playhead to the location in your sequence where you want the
clip to start (the sequence In point).
Move the playhead to the
location where you want
the new clip to begin.
3 Now, if you do an overwrite edit, you’ll see that the entire clip in the Viewer has been
edited into the sequence.
Since you used an overwrite edit, any clip items that were already in those tracks in the
sequence have been overwritten by the source clip.
The playhead moves to
the end of the new clip.
The new clip begins
where the playhead
was located.
547 Chapter 36 Three-Point Editing