Hi Eric,
Go for the black and white option rather than blue and green - One simple luma key will work better than trying to chroma key out two different colours. Also when you tear the paper, unless you've lit it perfectly then any shadows cast on the colour paper will freak out the keyer. A luma keyer (especially if it's a linear based one i.e. it can differentiate levels of edge blur and softness) is far less susceptible to these changes. Also, as you're probably shooting on DV (I assume) you are working with a compressed and reduced colour signal which makes chroma key from DV not the easiest to achieve cleanly.
And as to what is VT ? A term from the 'olden' days of editing and transmission it stands for VideoTape and I think here Steve just means the picture source - Steve Archbold, now that name rings a bell - where have you worked here in London ?
But, back to the question, go out and get some black and white paper and enjoy your ripping !
Cheers
Rob C
I've just seen that you want the image to appear to be moving off with the rip- Go into Photoshop and make yourself a Black and white matte of a rip.
On your base layer, put the video you want to reveal.
On the second layer put the video you want to rip off. Apply the matte you've made in photoshop so that only one half of this image is visible.
On the next layer put the same image as layer two and apply the photoshop matte but invert it. What you should have now is a full frame of the ripping video sitting on top of the reveal.
Apply a page roll or page turn to the top layer and roll it off. the matte you have applied should then give the picture a ripped edge and the roll/page turn will give it the impression of being pulled away in pseudo 3D.
This is the principal I've used to achieve this kind of look in a linear tape environment, but unfortunately I don't have FCP here at the moment to give you any practical help - at least this might point you in the right direction !
Rob C