Why are my "Clip, Fade to" grayed out?

I'm new to iMovie (from Windows Movie Maker) and just playing around.  I've created a project and I'm trying to use the "Fade to" options.  But when I choose "Clip, Fade to" the options are grayed out.

In the project, click then drag across the clip thumbnails so that a section is highlighted with a yellow border. You can drag the handles in or out either side of the highlighted area in order to shorten or lengthen the selection. Now when you go to the menu item "Clip>Fade to" the selections for Black & White, Sepia and Dream will be available. Click on your preferred option to apply the effect.
The idea behind the "Fade to" is to create a gradual change within the clip from colour to black & white, sepia or dream. If you do this at the end of a clip, so that, say, the last 4 seconds are highlighted, the clip will gradually dissolve to the selected effect and finish on that effect. Or, you can create the effect within the clip so that it fades to the effect, then back to the original colour, based on where you've placed the highlighted area within the clip.
When you apply the effect, iMovie will split the clip at the appropriate points, then will automatically place a dissolve between each split segment.
NOTE: You can adjust the duration of the dissolve (fade) by double-clicking on the transition and adjusting the time in the Inspector.
John
PS. Highlighting a portion at the very beginning of a clip then applying the effect will cause the selection to change from the effect to the original colour. That is, you can fade up from black & white, or sepia or dream to the original colour.
Message was edited by: John Cogdell - added NOTE and fixed typos.
Message was edited by: John Cogdell - added PS

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