I've marked an In and Out point for the clip in the source frame but I cannot figure out how to drag it to the timeline. I can click on both audio and the video together and seperately, but it wont allow me to put them in the timeline.
Post a screen shot of your timeline.
Have you created a Sequence, or are you trying
to drag a clip to an empty Timeline Panel?
Create a Sequence that matches your footage by doing this:
Or, right-click a media file and select 'New Sequence From Clip".
How do I choose the right sequence settings?