If you don't see two dotted boxes in the Monitor, choose Window > Title Window Options and check Show Safe Titles to see the title safe (the smaller box) and action safe guidelines (the bigger box). Make sure any titles you create fall completely withing the title safe box. This ensures that they won't be cut off or distorted by the TV monitor when your video is viewed.
Choose File > New Title.
Click on Timeline, double-click on a clip to open in clip window. Find an appropriate frame and drag it into the Title window. It's there only for reference (the above example has no reference image).
Use the Text tool in the Title window to enter text.
Click on the Selection tool to set the text, then adjust color, size, font, text box window size, etc. You can also use the left and right Arrow keys to nudge the text into place.
Remember, right-clicking on the PC will bring up the context-sensitive menu for options.
To add a drop shadow, click and drag on the T icon below the Title window tool bar.
Save the Title (into a Graphics Bin in the Project Window), and close it out.
To put a title on your video, drag the title from the project window into Video 2 track over the clip you want to add it to. To check it, put the cursor in the Timeline's timecode area at the point you want to preview, and hit Alt-click to render and preview one frame. Keep the mouse depressed, and you can move back and forth in the Timeline to see how it looks over a few frames.
To fade in the title, open the Video 2 track by clicking on the little arrow. You'll see a red line, which acts like a little rubber band. Put your cursor over the rubber band until the finger tool appears. Click at the point you want the fade-in to be complete. Then move to the end of the red line, get the finger tool, click and slide it down to the bottom. To fade out the clip, do the same on the other end. To check, do Alt-click and hold down the mouse while scrubbing over the clip.
Render the the entire title on the timeline to see the entire effect.