My thought was to drop the Soul Train video on to Video Track 2 in its 4:3 aspect ratio (black bars on either side), drop a color board on Video Track 1 and add one of the Grid Transitions to the color board so as to give it motion.
The following 2 problems are occurring:
1) The black bars on the side are actually there. I thought they were transparent areas that appeared when inserting a 4:3 video into a 16:9 project. Shouldn't these black bars be transparent and not solid fill?
2) When I double click on the 4:3 Soul Train clip to take me to the PIP Designer where I can select Chroma Key, the video is stretched from 4:3 to 16:9 -- Not Cropped - STRETCHED. And yes, I do have the "Maintain Aspect Ratio" box checked. Any clip that I apply Chroma Key to is stretched to the 16:9 aspect ratio. When I turn Chroma Key off the clips revert to the correct 4:3 aspect ratio.