I have video from a RED ONE that was shot in 4.5k. I want to edit it in Final Cut 7. How do I properly convert this footage to edit in FCP 7 so I can revert it back to 4k for coloring in post and not lose resolution in the process.
Depending on the speed and power of your computer and how much disk space you have, there are two options.
Option 1 Limited speed and disk space: Use Redcine-x Pro (free download) to convert all the R3D files to ProRes422 1080p. Edit with these files then once you have locked the picture export an XML and open it with DaVinci Resolve (or whatever colour grader you're using) and reconform back to the original R3D files for grading.
Options 2 Powerful computer with enough disk space: Use Redcine-x Pro to convert all files to ProRes444 with native clip resolution (in your case 4.5K). Then simply import those into FCP7 and edit and grade with these files.
There is no limit to the resolution FCP7 can handle. I've heard this many times that FCP7 handles up to maximum 2K, including RED's own Final Cut Studio Whitepaper on the matter. But the fact is that FCP7 can handle any resolution up to and beyond 4K. But because it's unpractical to handle files sizes this large there's really no need.
One glitch to keep in mind though is that the Sequence Settings of the Timeline will only display a maximum resolution of 4096x4096. Even if your timeline frame size is larger. But you can check the actual dimensions in the Browser window under Frame Size. Here it will always show you the actual resolution.
As a grader I would always want to go back to the r3d files so option one is best for me. Also FCP really works best with 1920 x 1080 ProRes422. There are gamma mismatch issues with 4444 if you round trip grade in Color as well. But assuming da Vinci Resolve or Baselight I expect most colorists would prefer the Redcine X to HD and then xml to Resolve and relink the r3d files.
All round the most reliable workflow which takes best advantage of both FCP7's limitations and the strengths of grading with RED files directly. ProRes4444 forces a baking in of ISO, color temp and exposure and has less latitude to grade with.
Make sure you do not change clip file names or timecode.