Hi,

One way is to use the child track of a Parent/Child combo as your PIP. start with three tracks for the effect:

1. Bottom track (#3) is the 'Host' track.

2. Put the PIP footage on the second track (#2), don't resize the track.

3. Insert Generated Media on Track #1. Choose Rectangular or Eliptical White to Black and drag the event so that it covers the entire time period of the PIP video.

4. Click the UP arrow on the left of the track #2 to create the parent/child combo with track one.

5. Open Track #1's Track Motion dialog box and resize the frame to your specs. Track 2 will follow the size change.

At this point you can adjust track #1's Generated Media by moving the color markers around the screen to increase/decrease the edge of the mask and also to adjust the overall opacity of the pip. if you need to, you can add more color markers for more control over the mask, stick with white, black or shades of grey. As long as you don't go all the way to the frame edge the border will blend into the host track.

Good luck,
franco