Lots of ways to do this; the simple way is to use a color correction effect in conjunction with a blur effect. Here are a couple starting points for you (effect presets): Film Flashes. There are "out" version and "in" versions, to be applied to outgoing clips and incoming clips, respectively. Also, there are software versions that use Fast Blur, and versions called ACCELERATED that use Gaussian Blur, which is both a better looking blur and is accelerated by hardware MPE.
Tweak to taste and save your own presets.
For those who don't want to watch a whole 15 seconds of commercials (or those outside US and Canada who can't watch Hulu), I'm posting some screen grabs, but they don't do the transition the same justice as watching the actual video, but hopefully you can see what I'm talking about in this series of stills.
Colin, thanks! I loaded your preset and I'm fiddling with it now. Could you tell me the company name you were referring to that has the advanced blur? I would like it to be as easy to apply as the cross dissolve.... if that's possible.
Not sure if this is true, but a fellow editor told me this is an out-of-the-box transition in Final Cut. ??
For a new kids show I"m working on, I could see myself using this transition several times a show if it's quick enough.
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You might try Pixelan AnyFX (dirt cheap and fast); there are some nice blur effects plus blending that might do what you want. Another option (haven't tried it) might be NewBlueFX Light Blends (not as cheap).
I do this effect using Digieffects Glower, which is part of the Delirium bundle. I think the biggest thing to note, though, is that this isn't really a transition per se, but is instead a transitional element. Notice how in the example you linked that the two shots don't blend together--the outgoing clip blows out and the incoming clip does the reverse. At no point are the two shots composited together; the presets I posted don't composite the shots together either (though you could add something like a short Additive Dissolve if you wanted). Unless the transition you're using specifically doesn't blend the shots (sort of like a Dip to Black/Color transition), you'll have to decide which is the look you like better.
Based on Colin's ideas as well as others from other sites (dvinfo.net), I got it figured out. Here's a quick tutorial I did for anyone interested in using this transition.
Kudos to Colin for all the help!