Blender’s VSE doesn’t have a titling tool! I know that may come as a shock, some suggest that it is a core feature for an editing application. But the Blender foundation would remind you that Blender’s VSE is really just a clip sequencing tool, that is a device that allows you to shuffle rendered media and trim as required. In recent times you have been able to perform simple audio effects and enhance your images with robust color correction tools. You can even stabilise video now! (ignore the lack of simple keying effects).

Given these restrictions Blender does allow some quite advanced titling effects. Of course this is achieved via the 3D suite of tools. Basically what I outline in this video is the merging of a 3D scene with video in a master edit scene. I have suggested that you split off a new floating window and demonstrate the ease with which you can key and animate some basic text overlay.

Further to this tutorial, I have created an example of adding a drop shadow and outline to the text scene. I have used the compositor in that source scene. I found that the rendered scene played at almost realtime in the VSE master sequence.

Compositor frame grab, showing a drop shadow and outline on one layer.

Compositor frame grab, showing a drop shadow and outline on one layer.

You can get the .blend file here (on the original BA forum post). http://blenderartists.org/forum/showthread.php?290648-Text-in-the-sequencer&p=2367973&viewfull=1#post2367973