Luminance keying is similar to chroma keying except that it only uses the luminance value to determine if a pixel is from a foreground object or the background. This particular node is useful when using stock footage explosions which are usually shot in front of a black background.
The stock footage I am using here is available from www.detonationfilms.com, which has quite a bit of free footage and even more great footage for sale.
To get our explosion matted properly we need to load it up as an input node in the compositor. Next add a channel key node and an connect the input to the input node loaded with the explosion clip and then connect the output to the compositor output node. Be sure to select a color space that has a luminance channel such as YUV or YCbCr. Also be sure to select the 'Y' channel.
By adjust the high and low levels you can determine which luminance values are considered opaque and transparent, and how much blending is between the two.
The position of the high slider determines the luminance value that is considered opaque. Anything value higher than this slider will be opaque.
The position of the Low slider determines the luminance value that is considered transparent. Anything lower than this slider will be transparent.
Any value between the two sliders will be somewhat transparent depending on how close it is to the low or high slider.
Saving for later use
You could now connect the output to the composite output and render the movie out as a sequence of images (be sure to use RGBA and a format that supports transparency like PNG) and you could have a video clip with the alpha channel ready to apply for future composites. I would recommend you then use this new video clip (with the alpha information) as the texture on a plane and insert the plane in to the 3D rendered view of another .blend file. It would then be easy to animate the translation/rotation/scale through IPO's and render the output to an image or video. You could then use this new image/video (with multiple explosions if you wish) to be composited over another image, such as Super Wu-Man fighting a Troll.