In video production the dissolve is analogous to the crossfade in audio – in fact it is sometimes referred to as a crossfade. Essentially the picture from one scene is gradually replaced by the image from a second scene. When done gradually enough there is a period where both scenes can be seen simultaneously, superimposed over one another on the screen. There are actually many different types of dissolves in video: the cross dissolve is most similar to the crossfade mentioned above, but there are many more (some handle chrominance (color) information and luminance (brightness) information differently, etc.), with each one providing a uniquely different effect.
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