GOLLY!
I take it you've not read the Release Notes or the User Guide on how to prep your sequences for Color?
Ummm, while it'll read a few layers it really is best to have only one layer of video.
If the Release Notes and User Guide are too much for you, Patrick Inhofer has written up a fantastic treatise on how to prep successfully for Color here, I would strongly suggest you read at least one of the aforementioned documents.
http://www.fini.tv/blog/finishingline_files/prep_fcp_sequence_forfinishing.php