So this was an interesting problem. A poster on another forum was talking about how he wanted to composite a clip with another clip using a blend mode. But he wanted to be able to add a dissolve to the front and back end of the clip.
If you've tried this, you know that you can't add transitions to connected clips (though I don't really understand why not). If he makes his connected clip into a storyline, then he can add the dissolves, but he loses the ability to composite because the clips inside a connected storyline do not composite with the main storyline, and the storyline itself has no way to blend.
The solution is to use compound clips in a very specific way. Lay your blending clip into the main storyline at the end. Grab the position tool (P) and drag the clip away creating a gap clip. OPT drag the gap clip to copy the gap and place it on the other end of the blending clip. You should now have gap clips bookending your blending clip. Switch back to the selection tool and select the blending clip. Double-click the dissolve transition (or transition of choice) to add it to both ends of the clip. Lasso the blending clip AND the gap clips and create a compound clip from it (OPT+G). Drag up and connect to another clip. Select the compound clip and set the blend mode of choice.
Andy
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