Apple Final Cut Express HD - Manual (Page 325)

Chapter 24 Drag-to-Timeline Editing 325
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To do an insert edit:
m Drag the clip to the upper third of a track in the Timeline.
To do an overwrite edit:
m Drag the clip to the lower two-thirds of a track in the Timeline.
Note: If you drag a sequence clip to another location within the sequence, an
overwrite edit is performed by default. To perform an insert edit instead, hold down
the Option key after you begin dragging the clip.
Drag a clip to the upper
third of a track to do an
insert edit.
Drag a clip to the lower
two-thirds of a track to
do an overwrite edit.