You can use the layer/footage panel to pick out a section and drop it into a comp.
I usually use Premiere for this sort of task and then either copy and paste the clip from Premiere into AE or use the import Premiere Pro Project command in AE to bring the sequence into AE with each clip on its own layer.
Thanks. I tried doing it in the Footage panel, but couldn't see how to select In and Out points—the Layer pull-dwon menu was grayed out.
You can use the Set In Point , Set Out Point , Ripple Insert Edit , and Overlay Edit controls in the Footage panel to trim a footage item and insert it into a composition. Trimming in the Footage panel can be more convenient than adding the footage item to a composition and then trimming its layer in the Timeline panel.