I can't talk to coremelt, but I use Boris. Boris will determine what the sequence format is and will use that for all clips in the sequence. For a transition to work, the incoming and outgoing clip have to have the same format. That's why what you identify as incorrect scaling is occurring and only affects the images during the duration of the transition. When you apply a 2 second transition, the program takes 1 second from the outgoing clip and 1 second from the incoming clip and creates a new clip 2 seconds long to fill the gap. That's why the issue only shows during the transition.
If I understand what you are trying to accomplish overall, you are making this far to complicated. For Boris, the still image used as a PIP doesn't have to be on a Premiere track. You place the Boris effect on the background clip in premiere. Open the Boris effect controls.You create a media plane above the background. click on the image icon for that plane and browse to the image you want to use as a pip and click. That image should now show above the background in its original size. Use the transforms for the pip media plane to size and position the pip and apply borders or shadows as you see fit. keyframe the opacity on the pip media plane to fade in and fade out the pip as you need. If the pip image resolution and pixel ratio differ from the background, you can change the values in the pip image track properties.
If you don't want to effect the whole duration of the background clip, place transparent video clips of the desired length on the preniere track above the background track and apply the effect to the transparent clip.
Thank for the reply. However, I am not creating PIP, just transitioning between clips. I am now looking at Boris RED as an alternative. That seems to be more effective at creating transitions thant the BCC drag and drop filter transitions I'm using now.
I did find a work-around, in case anyone else finds this thread with the same problem.
Since the transitions I am using act like filters and affect the entire clip (not like the built-in Adobe transitions), the piece of the first clip that has the transition needs to be cut off the main clip and placed over the second clip, like this:
V2: -------------------------------[Clip 1b]-------------------
V1: --[[[[[[[[[[Clip 1a]]]]]]]]]]-[[[[[[[[[[Clip 2]]]]]]]]]]--
That's what was causing the issue. The second clip on V2 (Clip 2) was scaling incorrectly. In order to fix this, I removed the effect from Clip 1b, nested both Clip 1b and Clip 2, and then added the transition effect to the Clip 1b nest. This seemed to trick Premiere, and it now displays the clips properly during the transition.