PD7 is 13 years old, ancient by tech standards, but you should still be able to drag and drop a fade transition (not an effect, unless they did things really differently back then) directly onto the start or ending of a timeline clip. Maybe a screenshot or screen recording of what you're trying to do would be helpful.

In more recent PD versions, you can also use keyframes to set the opacity level from 0 to 100 to fade in/fade out a clip and that might be an option in PD7 as well. I started with a new PC with an SE version of PD8 but I no longer have any versions prior to PD13 installed. Maybe some longer serving volunteers would have some answers specifically for PD7

Quote PD7 is 13 years old, ancient by tech standards, but you should still be able to drag and drop a fade transition (not an effect, unless they did things really differently back then) directly onto the start or ending of a timeline clip. Maybe a screenshot or screen recording of what you're trying to do would be helpful.

In more recent PD versions, you can also use keyframes to set the opacity level from 0 to 100 to fade in/fade out a clip and that might be an option in PD7 as well. I started with a new PC with an SE version of PD8 but I no longer have any versions prior to PD13 installed. Maybe some longer serving volunteers would have some answers specifically for PD7

From the top left corner (Fade effect) I'm dragging down to the bottom right to place where the clip ends.
On the Fade effect square i'm dragging appears the "prohibited/not allowed" symbol when hovered over the clip.

Help section describes Fade only for audio.
Typing "Keyframes" in the index help has no result.

I appreciate your answer.

Quote From the top left corner (Fade effect) I'm dragging down to the bottom right to place where the clip ends.
On the Fade effect square i'm dragging appears the "prohibited/not allowed" symbol when hovered over the clip.

Help section describes Fade only for audio.
Typing "Keyframes" in the index help has no result.

I appreciate your answer.

That fade will only work for video in the top "Master Video Track" which you are not using. You are trying to use it in a PIP track for which it won't work. If you want to fade a PIP track, double click the video and add the fade there in the motion icon settings.

Jeff