That’s exactly how it should work, but remember to double-check that Continuously Rasterize is checked for each vector layer.
What’s more, if you up-res each of your video clips individually, replace the SD clips with the new up-ressed HD clips in your DV PAL sequence and scale them back down to fit in as the originals did, Collapse Transformations will preserve your resolution. In other words, a 400% blowup of a 25% reduction will look like the original at 100%, instead of a hideous pixellated mess.
Walter Soyka, Principal
Keen Live, Inc.
Presentation, Motion Graphics & Widescreen Design
RenderBreak: A Blog on Innovation in Production