I finally managed to fix/hack the xml export file from Live Cut so that it works in FCE.
*Here is my solution:*
In Live Cut I choose "Export as bin with clips and sequence" and "swiss cheese" (multiple tracks).
I open the file in Text Wrangler.
The four source clips are listed near the top of the file. I remove the <media> element from each of them. That's everything between <media>...</media>
Then in the sequence I replace all the clip id's with their names. Their names are the same as the source file so I'm not sure what is happening here, but it works.
I save the file and drag it onto the FCE icon so it will import. Now the sequence exports as expected and is playable in Quicktime.
The one caveat is that I haven't been able to reconnect the clips in the sequence to their master clips in the bin. They are essentially master clips themselves, but this works well enough and quickly enough that I think Live Cut will be worth using.
*To make this quick and painless I saved the following regular expressions in Text Wrangler:*
To remove <media>...</media>
Search for: url>\s
<media>s*.*s*.*s*.*s*.*s*.*s*.*s*.</media>
Replace with: url>
To rename the clip id's:
Search for: <clipitem id="(.
)">(s*)<name>(.)</name>
Replace with: <clipitem id="\3">\2<name>\3</name>
To really make this painless, it would be great to have a little applescript/shell script droplet to drop the file on, but that's beyond my abilities.
*For what it's worth, this is what the useable xml file looks like:*
<?xml version="1.0"?>
<xmeml version="1">
<project>
<name>GJ07-LIVEu01-cut</name>
<children>
<clip id="GJ07-LIVEu01-dyr">
<name>GJ07-LIVEu01-dyr</name>
<duration>9398</duration>
<rate>
<ntsc>FALSE</ntsc>
<timebase>25</timebase>
</rate>
<file id="GJ07-LIVEu01-dyr1">
<name>GJ07-LIVEu01-dyr</name>
<pathurl>
file://localhost/Volumes/SeagateSATA/GJ07-LIVE%20DVD/GJ07-LIVEu01/GJ07-LIVEu01-d yr</pathurl>
</file>
</clip>
<clip id="GJ07-LIVEu01-ruch">
<name>GJ07-LIVEu01-ruch</name>
<duration>9398</duration>
<rate>
<ntsc>FALSE</ntsc>
<timebase>25</timebase>
</rate>
<file id="GJ07-LIVEu01-ruch2">
<name>GJ07-LIVEu01-ruch</name>
<pathurl>
file://localhost/Volumes/SeagateSATA/GJ07-LIVE%20DVD/GJ07-LIVEu01/GJ07-LIVEu01-r uch</pathurl>
</file>
</clip>
<clip id="GJ07-LIVEu01-kran">
<name>GJ07-LIVEu01-kran</name>
<duration>9398</duration>
<rate>
<ntsc>FALSE</ntsc>
<timebase>25</timebase>
</rate>
<file id="GJ07-LIVEu01-kran3">
<name>GJ07-LIVEu01-kran</name>
<pathurl>
file://localhost/Volumes/SeagateSATA/GJ07-LIVE%20DVD/GJ07-LIVEu01/GJ07-LIVEu01-k ran</pathurl>
</file>
</clip>
<clip id="GJ07-LIVEu01-zbliz">
<name>GJ07-LIVEu01-zbliz</name>
<duration>9398</duration>
<rate>
<ntsc>FALSE</ntsc>
<timebase>25</timebase>
</rate>
<file id="GJ07-LIVEu01-zbliz4">
<name>GJ07-LIVEu01-zbliz</name>
<pathurl>
file://localhost/Volumes/SeagateSATA/GJ07-LIVE%20DVD/GJ07-LIVEu01/GJ07-LIVEu01-z bliz</pathurl>
</file>
</clip>
<sequence id="Sequence 1">
<name>GJ07-LIVEu01-cut</name>
<duration>-1</duration>
<rate>
<ntsc>FALSE</ntsc>
<timebase>25</timebase>
</rate>
<media>
<video>
<format/>
<track>
<clipitem id="GJ07-LIVEu01-dyr">
<name>GJ07-LIVEu01-dyr</name>
<duration>9398</duration>
<in>3649</in>
<out>3710</out>
<start>3649</start>
<end>3710</end>
<file id="GJ07-LIVEu01-dyr1"/>
<sourcetrack>
<mediatype>video</mediatype>
<trackindex>1</trackindex>
</sourcetrack>
</clipitem>
+...multiple clips and tracks removed to shorten the example+
</track>
</video>
<audio>
<track>
<clipitem id="GJ07-LIVEu01-dyr">
<name>GJ07-LIVEu01-dyr</name>
<duration>9398</duration>
<in>0</in>
<out>9398</out>
<start>0</start>
<end>9398</end>
<file id="GJ07-LIVEu01-dyr1"/>
<sourcetrack>
<mediatype>audio</mediatype>
<trackindex>1</trackindex>
</sourcetrack>
<link>
<mediatype>audio</mediatype>
<trackindex>1</trackindex>
<clipindex>1</clipindex>
<groupindex>1</groupindex>
</link>
<link>
<mediatype>audio</mediatype>
<trackindex>2</trackindex>
<clipindex>1</clipindex>
<groupindex>1</groupindex>
</link>
</clipitem>
</track>
+...more audio tracks removed to shorten the example+
</audio>
</media>
</sequence>
</children>
</project>
</xmeml>