I apply the RED plugin to a video clip on my timeline in FCP 7. I step into RED's UI and see nothing but a green box for V1. I can do whatever I plan with the comp and hit Apply, which steps out of RED and shows up as expected back on the FCP timeline. Any idea what's going on? Makes placing anything on screen but not having V1 as a reference a giant PITA.
In the RED interface, go under the Preview menu, and then into the Image sub-menu (should be about exactly half way down). In here, you should have the options of Proxy, Source and Update Source. You will want this to be set to Update Source, but it sounds like it's set to Proxy. If it's set to Proxy, change it to Update Source; if it's set to Update Source already, try setting it to Proxy and back to Update Source, and see if this makes it click.
If this does not work, go back to FCP and into a menu on your Sequence window labelled 'RT' (should be in the upper-left of the Sequence window). In here, you should have the options of 'Safe RT' and 'Unlimited RT' - if it's set to Unlimited, change it to Safe and re-apply RED.