Track Matte key would do what you want, albeit with a bit of work to set up your feathered edge. I often simply use the Linear Wipe transition effect to do quick soft-edged rectangular shapes.
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Already sent it there, thanks. I was just seeing if I could get some mob action going over Premiere's feathering capability.
And I came to the same track matte method as you, however I used the title maker to compose the matte. The title maker has the convenient attribute of letting me have the video clip that I actually want to affect in the background as shape the matte with the title tools. To make a feathered look I added an outer stroke that was the same color as the shape's fill. The stroke type was a radial gradient, so it let me turn down the opacity of the outer gradient color, resulting in a feathered look.
The final result looked okay, but the process was a little laborious.
Thanks for the reply.
It can be way easier than that. Just create a general shape that you want in the Titler, with a solid white fill. I usually set the Background to black and use Track Matte with the Matte Luma option, but if you leave the background transparent (the default for a title), you can use Matte Alpha.
After you edit your matte graphic into a sequence, drop a blur effect on to it. I typically will use Fast Blur, but Gaussian Blur is fine too (it's GPU accelerated in CS5.5). Adjust to taste; I usually tick the Repeat Edge Pixels option. I typically will make my matte graphic much bigger than the sequence dimensions, so that I can scale it, move it, rotate it and so on to get it where I need it to be. That's really all there is to it.
I have a folder full of pre-cooked matte shape graphics that I just use when I need such a thing. What's nice about precooking them is that you don't have the extra processing overhead, such as for the blur effect; I'll make my graphics in Photoshop and scale, shape, and blur as needed in the PSD. Import as a flattened image and you're good to go.