Apple Final Cut Pro 7 - Manual (Page 449)

About Drag-to-Timeline Editing
The faster, less precise way of editing content into a sequence is to drag a source clip
from the Browser or the Viewer directly to tracks in the Timeline. This simple method is
discussed more in
“Drag-to-Timeline Editing.”
Drag a source clip
from the Viewer...
...to a track in
the Timeline.
About Three-Point Editing
In three-point editing, you set In and Out points in both a source clip and a sequence to
determine the duration and placement of an edit. You also choose the destination
sequence tracks in which your source clip is placed. Three-point editing gets its name from
the fact that Final Cut Pro needs no more than three In and Out points in the source clip
and the destination sequence to perform the edit. Either the source clip or the sequence
has both In and Out points set, while the other has only an In or an Out point set. The
fourth edit point is inferred from the duration of the edit.
For example, if you set In and Out points in a source clip and an In point in a sequence,
the Out point in the sequence is determined by the duration of the source clip. In this
case, the sequence In point determines where the source clip is placed, and the source
clip determines the duration of the edit.
(1 and 2) Source clip
In and Out points
(4) Sequence Out
point (inferred) (3) Sequence
In point
449 Chapter 31 The Fundamentals of Adding Clips to a Sequence