What this does is tell Premiere that when it’s exporting the GIF sequence, it should delete everything in the image that matches that color to create a GIF of the video subject over a transparent background. This is another reason that you want to make sure to have the highest quality video possible; compression or low quality will create shifts in the solid background color, small and subtle but enough for Premiere to skip over them to leave a grainy “halo” effect around your video subject that you’ll have to manually clean up in the image editor of your choice. That kind of defeats the purpose of “quick and dirty” and leaves it at just “dirty. Very, very dirty.”
Quick and Dirty Transparent Flash Videos I: Premiere Preparation
By Adrien-Luc Sanders, About.com
You’ll need to enter the exact RGB (Red, Green, and Blue) values for the background color on your video; I just took a screencap of my video, pulled it into Photoshop, used the eyedropper to select the color, then checked the RGB values on my palette before entering them into Premiere to get the same blue.
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